Adam Enbar on the Power of Mission, Culture & People in Scaling Startups
Growth rarely occurs in a predictable logical pattern. We sat down with Adam Enbar, serial entrepreneur and investor, to talk about how having a well-defined mission and a strong team enabled him to scale his venture, Flatiron School. Within five years of its launch, Flatiron—a coding academy that is disrupting higher education—has grown to over 300 employees and in 2017 it was acquired by WeWork. As his venture continues to grow rapidly, Enbar learned the power of mission, company culture, and hiring the right people. In an unabridged conversation with Shikhar Ghosh, he identifies why having a co-founder, a strong mission and company culture can help you scale your venture. The two discuss insights on how the role of CEO changes as you scale, the importance of recruiting mission-driven people, and how to better interact with your board. An unedited transcript follows the video.
Adam Enbar interviewed by Shikhar Ghosh on October 18, 2018, at Klarman Studios, Harvard Business School.
Adam Enbar on the Power of Mission, Culture & People in Scaling Startups
SHIKHAR GHOSH: You’ve had a pretty, you know, long career in entrepreneurship. Sort of taking– what is being exposed to a company all the way from the beginning to becoming a public company and then starting your own systems. I’d be really curious about what you learned, um, or the kind of mistakes that you’ve made or you’ve seen other people make that now that you look back you say “you know, here’s a different way I could have done it.”
ADAM ENBAR: Yeah, so when we started the Flatiron School we were wanting to try a lot of different things, right? We knew we wanted to start a school that got people great jobs. And in the beginning, we had this 10% acceptance rate all the way down to 6% at some point, so it was really premium, really rigorous, and then, uh, at some point the city of New York approached us and they said, “Hey, can you do this for low-income students?” And that was totally not our brand, not our model. But we said “sure, let’s try it out” because, you know, expands the market, it’s a great thing. And we did it. They funded all these scholarships and it worked and it expanded our universe. It expanded our potential market size. It certainly expanded the impact we had, and it had this unbelievable impact on our ability to recruit great talent. So it’s a great, great experiment to try out. And there are other things we tried that didn’t work. And it was all good, right.
ADAM ENBAR: But as we grew that lack of focus and that willingness or desire to try new things became a real problem. Because we got to the point, for example, one point was around 2016 we had, uh, we had launched an online program. We were running our own campus programs. We were experimenting with K-12 education. We had programs. We had curriculum ranging from software engineering to mobile web development. Like, all this stuff was going on with a relatively small team, and we just weren’t doing anything particularly well. And, uh, we had this notion that “oh well this one big partnership could have this great impact.” Or “this one thing, let’s chase down this other idea.” And we were always looking at these big, you know, chasing these big whales that would for some reason – our idea, “oh, if we could close that thing, that’ll propel us forward.” And we had the realization that to really scale the company, not just to start it, not just to take it, you know, up to level three, but to really scale, it’s not about those big partnerships or those big glitzy things. It’s about focus. It’s about the incremental month over month growth.
And we had to make the hard decision to shut down probably half of the things we were doing. Said okay, we’re not going to focus on K-12 anymore, we- we’re gonna stop doing these programs. Some of which were cashflow positive, which is hard when you bare- little money. We said we’re going to put all of our money, all of our focus on this one thing and we’re going to do it very very well. And it completely changed our business. And it’s not the thing that I as an entrepreneur am particularly good at or enjoy. I like the big partnerships. I like the brand new things, the shiny objects but that’s what it takes to go from starting a business that’s doing interesting things to doing something that actually has the potential to scale to millions of people.
SHIKHAR GHOSH: And how does that process of scaling work? Because on the one hand you’re expanding, and then you’re coming back in and focusing. What do you get by focusing that you didn’t get when you work so wide.
ADAM ENBAR: Your resources as an entrepreneur are precious, right? And dividing those resources among different things or different initiatives is very problematic. So that in itself, just the ability to, uh, to have everybody aligned on one thing is incredibly powerful. And the other thing that I guess is related to that is, you know, when you have that alignment, when you have everybody in your company rowing in the same direction on the same boat as opposed to not necessarily on, like, parallel paths, you start to see the benefits of collaboration. So for example, when we were launching our online program. We had no idea how to grow it. We had this amazing brand in New York City and people would come and we had this very low acceptance rate, but all of a sudden we had this online program and we’re trying to enroll people in Seattle Washington, and, you know, London. So we had to get creative.
So I started something called the Growth Leaderboard. Where I said “these things contribute to growth.” You know, writing blog posts, hosting meet ups, speaking at conferences, right? Building up our leadership. And so I just started leaderboard where everybody at the company could participate, whether you’re a software engineer or a marketer or in customer service. And, um, it made it clear that this is what we were focused on, and everybody was aligned, and people from across every department said “okay, we’re focused on growth today” this is– and it’s clear to me how I can help. And when you put all of that energy behind one thing, it moves the needle in a way that is just impossible, um, if you don’t have that clarity.
ADAM ENBAR: Before I started Flatiron School I was working at HubSpot. Where I had just graduated from business school, and for some reason decided to take an entry level sales job. I was making 100 phone calls a day because I decided I wanted to learn how to sell. And one of the most powerful lessons I learned at HubSpot is the importance of having a giant goal. Like a giant mission. Or, as Brian [Halligan] CEO, he likes to call it “big hairy audacious goal,” the BHAG. I mean, we were– the mission of HubSpot was to transform the way the world is marketing. And, you know, I drank the koolaid. I was an MBA from HBS just making sales calls 80 hours a week because I believed we were transforming the way the world does marketing. We were helping small business owners. And we were doing that, I saw the impact on these small business owners, but it took like a year I left to realize at the end of the day I was just selling marketing software.
SHIKHAR GHOSH: Right, in fact your frame shifted, right. From “I’m making these calls, I’m a telemarketer” to “I’m changing the world.”
ADAM ENBAR: Yeah. Absolutely and, you know, the leverage that HubSpot was able to get out of their employees, the caliber of talent that it was able to hire to do jobs that, you know, everybody at that company could have made more money elsewhere. Could’ve had more, bigger titles elsewhere. But they were there because they believed in it and that was so powerful. Like, the ability to stretch dollars and bring in great talent because they believe in the opportunity. And when they believe, you know, they work harder, the company grows faster, and those people then in turn benefit because their career’s grown. So it really is a win for everybody. But it wouldn’t have happened if they just said “hey, we’re selling this marketing software, here’s our sales goal for next month so that we can pay our rent.” Right. The ability to connect it to this much bigger idea that’s so powerful.
SHIKHAR GHOSH: And that, you know, what you’re spending your time on is for to change the world. Not making phone calls.
ADAM ENBAR: Well yeah, I mean, you know, this change the world idea is a little– it starts to feel a bit silly at times, right? I think you have to ground it. So this is something I learned in taking that idea over to Flatiron school when I started Flatiron School. You know, people used to, like, ask us all the time “well what’s your mission, what’s your vision, what is strategy?” I realize I don’t even know the difference between all these things. What is a mission and a vision? II actually spent a lot of time researching that and I came to my own definitions that I like, which is a mission is why you exist, and it’s eternal so our mission is to enable to pursuit of a better life through education. That education should be about a better life. That will always be why we exist. Whereas a vision is what you want to accomplish. Right? So, the analogy you’ll often use is like NASA, where NASA’S mission is to pursue human discovery and space exploration whereas their vision are points in time, like a flag on the moon. We’re going to get a man on the moon by the end of the decade or we’re going to get to Mars or, you know, vision statements. And this is great.
ADAM ENBAR: And part of a job as a CEO is to relentlessly communicate that to your team so that they can connect to it. However, it’s really easy to- to lose connection to that. At the end of the day if you’re a salesperson, or a product person, or an engineer, and you’re working day in and day out, and you can think about changing the world through education, yeah maybe that’s inspiring the first couple times you hear it. But if you don’t, you know– These are big ideas and they take a long time to move. When we hit about 10 employees I hired a COO and hiring her was easily the best decision I made in the history of our entire journey at Flatiron School. And what one of the things she taught me, among many, is that you have to connect these things, these big ideas, down to what people are doing every day.
So how do you take something like that, kind of a lofty mission, and that kind of a vision, of this giant 10 year goal, and translate that into a strategy for “here’s what we’re doing this year.” That connects to that in a very clear way. And then how do you take that strategy and say “okay, if this is what we’re going to do this year, how do you create goals at the company where every single person can connect what they’re doing on any given day to that exact vision?”
SHIKHAR GHOSH: So give us an example that sort of walks down that waterfall.
ADAM ENBAR: Sure. So our mission is to enable the pursuit of a better life through education, okay. Our vision today is we want to build an alternative to the current system of higher education, right. We want to provide people with a different path. College is great for some people but it really doesn’t work for a lot of people. And so what is our strategy, how are we going to do that. We’re going to build a global campus, for life-long learners, focused on positive impact. Right. And those three things: global campus, life long learning, positive impact, are the three headers for all of our company goals. So what does a global campus mean? Well a global campus means, this year we’re going to open this many new locations. We’re going to pioneer this model of co-learning where, now that we’re part of WeWork, all of our online students, all around the world, get access to local WeWorks to study out of and so forth. Lifelong learning means we have to launch part time programs, etc. positive impact is our job placement goal, so we’re going to have X% job placement, we’re ongoing to have X%, you know, gender diversity.
SHIKHAR GHOSH: So positive impact is actually measurable positive impact.
ADAM ENBAR: Everything’s measurable. But not just that, it’s measurable in a way that, you know, you take something like global campuses. We’re going to open this many locations. Well, then now that layers down into the marketing team’s goal of what it looks like to launch to the instructors’ goals, the people team’s goals on hiring the staff for those campuses, and anybody at Flatiron School doing anything should be able to tie whatever their doing up to one of those subgoals that ties to either, you know, create a positive impact, or building lifelong learning, that ties back to this bigger vision of creating alternative education that ties right back up to our mission of enabling a better life through education. So whatever you’re doing on any given day, no matter how small it is, or what team you’re on and what your goal is for that month. Even if it’s, like, whether it’s a sales goal or shipping a specific feature on the product, you should be able to draw a direct line up to the mission.
SHIKHAR GHOSH: And did you, you as in management, you know, draw those lines? Or did you tell the accountant “your job is to close the books by the 5th of the month” and then they had to then sort of link, draw the line between that and the changing the world goal.
ADAM ENBAR: So, I mean, some of it ends up being relatively straightforward. You know, one of our impact goals is to have X% job placement, well it’s pretty obvious that the career services team, you know, that they have to do a bunch of work to that. That the education staff has to do a bunch of work in term of how they service the students. How we go about that prospect of matching top down vision and goal setting to bottom up here’s what we can do is honestly an ever-evolving process. It’s incredibly difficult and it’s probably more difficult when you’re small and becomes a little more clear as you’re scaling. Because who knows what your goals are supposed to be? What should our, you know, the first year we launch an online platform, what should our sales look like? And so you try to set goals that are ambitious, because you want people to think big, but if they’re too ambitious, it’s easy for people to just get demotivated, right? You don’t want everybody missing their goal by 50% every month and then just being sad all the time and so I think it- it ends up having to be a conversation between leadership and the team, of what can we achieve if we really push ourselves. But it’s really really hard and takes a lot of time.
SHIKHAR GHOSH: You sort of rode with HubSpot from being a small company all the way to being-
ADAM ENBAR: Yeah, I left right before the IPO.
SHIKHAR GHOSH: Yeah. But you sort of saw that whole journey.
ADAM ENBAR: Yeah.
SHIKHAR GHOSH: How did the world change for you, and what did you notice in that everything changed?
ADAM ENBAR: First of all, one thing I’ll say is that this is probably played out at this point, but I think Sheryl Sandberg famously said, you know, when you’re offered a seat on a rocket ship, don’t ask what seat, just get on. Learning, watching growth happen is such an unbelievable learning experience. If you can get a job or an experience at a company that is growing, whether they’re growing into glory or they’re going to implode fantastically, um, you learn more than you will anywhere. And most CEOs know this, because I can tell you that the single most valuable thing I can see on somebody’s resume is growth. Having been at a company that’s grown. Because they see what breaks. And that’s really the key, is that when a company grows quickly everything breaks. And knowing how to manage that is, you know-
SHIKHAR GHOSH: You see how the machine work, because you start to see-
ADAM ENBAR: Well you see how the machine breaks, right. And that’s what it is. The machine breaks and then you have to fix it. So for example, I found that, uh, if you do a decent job of setting a vision and setting goals and the company’s relatively aligned on what’s important, if you do that, 90% of problems are about miscommunication. 90%.
‘Cause everybody is smart. Everybody is trying to do the same thing. And so, when an issue arises, when conflict happens, when- when mistakes are made, it’s usually because there is miscommunication. And, communication in a company that’s growing is so difficult because no matter what, whatever you’re doing when your company has five employees, will not work when it has 20, and that will not work when it has 80, and that will not work when it has 150.
ADAM ENBAR: Um, so for example I remember this, like, surreal moment when Flatiron School had 8 employees and, you know, a couple of them came up to me complaining that, “It feels like we don’t know what’s going on any more. All these things are happening and we’re not, you know, which is, you know, great in the sense that they feel ownership. That like, how can, how can we be doing things and I’m not in on it? But, uh, I was like, there’s only 8 of us, right?
SHIKHAR GHOSH: Right.
ADAM ENBAR: And so, at that point I started something called the FWIN, the Flatiron Weekly Internal Newsletter where I would just send out an email every Sunday night about ‘here’s what’s happening’. And I kept that going for, like, five years. Didn’t miss a Sunday.
And then when we hit, something around 40 employees again people came up to me and said, “Well, you know, we only–” Yeah, there’s the FWIN, that’s, kind of, regular updates. But like, you know, we signed some big deal, or some big partnership and I only find out after it happens. I feel like there’s no input. So I started, what we call the weekly round-up. And every week we’d all get together, 40 of us for in-all-hands, and just talk about it, random stuff that’s going on. Doing AMA.
ADAM ENBAR: And then, you know, we got to 80, 100 people and people said, “Well, yeah, we have that and it’s unstructured. That’s great. But, like, we don’t know what the goals are, and we don’t know if we’re– you know, how are we doing as a company?” And we needed space for that so we just structured that. And, you know, today we’re near 300 employees, globally, you know, in between Europe and probably ten states in the US.
You can’t get everybody together once a week accounting for time zones and lost productivity. So now we have a monthly all-hands that’s more of a recap of the month. and we do weekly office hours with executives, and then a quarterly, you know, company meeting that’s more strategic. And I don’t know if that works, right? But you have to just constantly, constantly be trying new things because just communication channels are really, really hard to make efficient. And what, you know, no matter how close you are to having something that works, if you’re growing at all a- anticipate that it’ll break.
SHIKHAR GHOSH: Right. So, you know, it’s fascinating you chose those breaks because I’ve been working on something called a Rule of Three which is, you know, at three, at nine, at 27, at 81, at 270 that everything breaks. Just roughly, whatever you count it, right? That the structure of things change, and you can’t do the same thing. So part of being in a growing company is just expect it’s going to break and that whatever you put in is gonna be good enough till the next tripling, and then the next tripling, and the next tripling.
ADAM ENBAR: Yeah, and, you know, it’s really hard for, understandably, for the people that, you know, experience that growth. It’s painful. I mean, I remember being at HubSpot and saying like, “Oh, it used to be this way, and now, you know, um, you know–” For example when you’re young at the start, even if you’ve a job, when the company is small, even if you have a specific job, you still get to do a little bit of everything, experience a little-bit of everything. But as the company grows, it needs more specialization.
I remember that being painful for me. ‘Cause like, well now, you know, when I started it was all scrappy. And sure I was a sales person but I was also involved in these conversations. And now I’m just selling all day. Right? So, that stuff can be painful for people. Right? And I think, you know, and then because naturally fewer and fewer people know everything that’s going on. In fact, nobody knows everything at some point. It’s really easy for people to fall into a pattern of either not communicating at all or assuming the worst. Right? Seeing something at a company and saying, “That’s dumb. Oh well.” Or seeing something and it’s saying, “Oh, they’re making this mistake.” It’s, you know– They just don’t care.
SHIKHAR GHOSH: Putting an interpretation on it. Yes.
ADAM ENBAR: Yeah, everybody can have– And something, you know, I think that’s really important is creating a culture where, people can assume the best. And part of that is enforcing culture where you encourage, kind of, open communication.But, you know, sometimes decisions get made because, you know, they don’t look like the right decision because, you know, the person doesn’t have all the information and sometimes decisions get made, and they’re the wrong decision. Right? And it totally is a dumb decision.
SHIKHAR GHOSH: But the intent wasn’t to make a dumb decision.
ADAM ENBAR: Of course, Right. Again if everybody is aligned, its just miscommunication that causes these problems because hopefully you have a culture where employees feel free to raise their hand and, you know, there’s a huge, huge difference between building a culture where people raise their hand and say, “Hey, that’s a dumb decision,” versus saying, “Hey, I wouldn’t have made that decision, I’m curious how you guys got to it.” Right? And if you can do that, um, you know, ‘A’, you’ll have a team that is more open to understanding why, you know, certain trade-offs are made. And, ‘B’, in the best of cases, a team that will help you realize when you make mistakes and, you know, provide input that’ll help you change it.
SHIKHAR GHOSH: So, one of the things that a lot of founders, sort of, don’t intuitively understand when they’re scaling for the first time, is they stay on the top. Everybody else gets pushed down. And so, you know, as you’re adding people, typically it’s a level below the founder. You- you’re adding senior managers, you’re adding middle managers, and so on. A lot of the people who were doers right at the beginning, start to go lower and lower, and lower, and further from the seat of decision-making, and information coming together. That’s a hard thing to do.
ADAM ENBAR: Yeah, it’s really hard. Um, and, you know, sometimes, uh, there are people that can scale with the company. And I think, uh, you know, it’s interesting, I find most founders make mistakes in the opposite direction which is not senior people early enough. Right? It’s, that’s, you know, in Silicon Valley, in the start-up world we tend to discount gray hair and it’s a crazy mistake ’cause there’s a difference between wisdom and intelligence. And wisdom comes from seeing things and being able to bring people onto the team that have seen things before has been massively, massively helpful. At the same time, of course, you know, Millennials get a bad rap for a kind of a sense of entitlement. But I think that’s, you know, that’s a cynical way to view a generation. I think an equally valid way to view it is, these people, you know, you have a generation of people that are dying to have an impact and are willing to work really, really hard because they care. And they’re gonna sacrifice salary for social good.
They just want to have a say if they’re gonna do that, if they’re gonna work those extra hours, if they’re gonna sacrifice, you know, going to be an investment banker to go work in education. They wanna have a little more of a say than they would have otherwise and I think they deserve that. And you can get a lot out of it. So for example, you know, as we scale we have, you know, at Flatiron School for example, we have a career services team that’s compensated like a sales team. They get bonuses and commissions when they get students jobs.
Right? ‘Cause that’s what we believe is our job and let’s motivate them like sales people. But as we scale, like in any other sales team, the commission structures break. Should it be regionalized? Should you be paying per job or per interview?
What if there’s a, you know, you have people responsible for different regions, but then you have global companies, who owns that account? and who owns that lead? Right? We can lock ourselves in a room and analyze every, you know, cost and benefit of structuring the team this way, and building the commission that way, and even if we do come to the ideal decision, you know, no we will not have communicated every trade-off we made. And on top of that we probably won’t come to the best decision. Right? Because there is no best decision.
There’s trial and error. Instead what we do is we say, you know what? We hired a bunch of really great people that are really smart, let’s tell them. “Look. Here’s what’s breaking.” Right? If we have a sales, you know, a business development person in New York that owns Microsoft as a lead, and then somebody in Texas wants to get their student a job at Microsoft, but they can’t call them because somebody in New York owns that. That’s a problem. Right? There’s a bunch of potential solutions. We can split the commission, we can, um, you know, you can get bonuses for referring people, you can, you know, there’s a bunch of different ideas here, but we gotta change something. We gotta make it work for the students.
What are your ideas? It’s not a democracy. We gotta do. We’re not necessarily gonna take a vote here. Right? You know, we can’t, you know, I’m sure everybody would love to say, “Well why don’t you just pay everybody double commission and then–” Right? Like, we gotta think about this about all the trade-offs. But help us build the system that’s gonna incentivize things properly. And we do that people tend to rise to the occasion.
SHIKHAR GHOSH: Yeah, and recognize that whatever we put is gonna have some problems and we’re willing to change it after that.
ADAM ENBAR: Yeah. You have to be willing to admit those mistakes but if you can involve people in shaping the company, you know, they’re more forgiving of the mistakes because they understand that-
SHIKHAR GHOSH: They made it themselves.
ADAM ENBAR: Yeah, well, you’re not just putting the mistakes on them but they understand the complexity of the issues that you’re confronting. Right? They understand why this is hard.
SHIKHAR GHOSH: Okay.
ADAM ENBAR: Um, and if you lock yourself in a room to, kind of, protect people or try to make the right decision on your own, um, you lose that trust.
SHIKHAR GHOSH: Right.
ADAM ENBAR: The entrepreneur-board relationship is a very funny thing. I still don’t have a great grasp on it because you get into this relationship with people that, you know, it’s so personal. It doesn’t just determine the strategic decisions of the company at the fundraising stage. You know, there are points at which it, to some extent, determines the, you know, the financial of your family. Right?
It’s such a deeply personal thing, and, um, you know, every board member has their own view of how involved or not involved they should be. Every board has its own culture, like. It’s developed around the personalities of the people sitting around the table. And, uh, I think, uh, something that’s important for, uh, I think, entrepreneurs is to- to appreciate that, uh, while it- it is great to have a- a positive and friendly relationship with your board, um, and you should absolutely be as transparent as possible, like, that- that will always, the– It’s almost always the right decision. Um, there is a misalignment of incentives. Right? A- and that’s very real.
SHIKHAR GHOSH: And information
ADAM ENBAR: Sure.
SHIKHAR GHOSH: Yes.
ADAM ENBAR: And that’s a very real misalignment. And unfortunately that misalignment exists in the most tense, difficult situations, which are often about fundraising. Fundraising or selling the company. Right? When you’re fundraising, your board wants to put in as little money as possible for the highest valuation possible. Right? That’s what they wanna do. And it’s not because they’re bad people. It’s because they have a fiduciary responsibility to their LPs. They are investors.
They might be friendly with you, but in that situation it would be unethical for them to be nice to you. They have to return value to their LPs in the best way possible. And you have to understand that going in. You know, I mean, like most companies, we faced times at Flatiron School when we were like, things were going super-well and our board was saying, you know, “Take a lot of money. Build a rocket ship.” Because they’d rather, that because of the structure of venture capital they’d rather have, um, uh, you know, take a shot at a grand slam and potentially go to zero, than, okay, relative, you know, increase to a hundred million dollar exit. Right? Where if you’re a founder, we have a lot of student loans and a kid on the way maybe, you’re not at the place anymore, right?
SHIKHAR GHOSH: You don’t have a diversified portfolio of six companies.
ADAM ENBAR: And that’s one of those things that you can’t actually tell your board. Right? That’s one of those th- things where you have to posture, put on this face, and like, “Yeah, no a billion dollars or bust.” Right?
Because if you, you know, falter a little, maybe they’ll say, “Oh, you know what. Maybe I don’t want to re-up on this ’cause he’d sell for less than is worth my time. And the converse is also true. Right? You go through these times, and we certainly did, where we’ve had to have lay-offs and things get really hard, and, you know, if you’ve raised ten million dollars, you know, you could end up in a situation where you’d rather continue fighting it out, can stick it out. Whereas your board might say, “you know what? Somebody’s willing to buy the company for ten million dollars. We’ll get all our money and we could walk away, and we’re kinda over this.” And you’re left with nothing.
And so, these are the most– Whether it’s on the upside or the downside, these are the most intense and most difficult conversations where you really need trusted advisors. You really need people to talk to just to figure out what’s going on inside your own head. And, those are the situations where your board isn’t necessarily aligned with you. Uh, we’ve had-
SHIKHAR GHOSH: So, what do you do?
ADAM ENBAR: I think a couple of things. So first of all, I think if you have to, you know- you can’t just step in and manage your board at those times. You’ve to manage your board throughout your entire relationship with them. And that’s what they want. They will, you know. I was also in venture capital and venture capitalists don’t want entrepreneurs that they have to follow-up with and bug, and, you know, pull information from. You know, they want, um, the CEO of the company to just say, “Here’s what’s going on. Here are the priorities. Here are the challenges I’m dealing with. Here’s exactly how you can help me.”
Right? And if you manage it that way, then you’ve, you’ll have earned the credibility and the trust that when things get hard, when there’s tough decisions to be made, that you can say, “Look, I know things are going this way or that way, I recommend this and this is why I feel that way.” And hopefully you’ll have earned enough, um, uh, trust to listen.
So that’s one is you have to be proactively managing your board. You don’t wanna end up in a situation where because you’ve been lazy about updates or because you haven’t communicated enough, now they have to step in and say well now I want this and I want this and now, now, now I have to inject my own opinions because even the best VC’s I know that they are not the entrepreneurs. They know that they don’t have the information and, you know, they have to rely on you. And the second thing is find a different source of-
SHIKHAR GHOSH: Advice.
ADAM ENBAR: Feedback and advice. So, actually something that’s unbelievably has been unbelievably helpful to me is through the HBS Rock Center I was put in a small group of six entrepreneurs, six or seven entrepreneurs, of similar stage companies. This was probably maybe three or four years ago to just set up a, you know, kind of group therapy session. Once every three months we’d get together and just talk about problems and go around in circles and it was facilitated by somebody at the Rock Center for about, you know, maybe we had four meetings like that. And since then we’re still getting together. We’re getting together. We organize it ourselves but it’s, you know, it’s seven people that have remarkably similar problems and are great at listening and we all know that there aren’t right answers and we can ask each other hard questions and we know that we’ll all keep it confidential because we’re all saying really, really confidential stuff but having people that you trust and respect to bounce ideas off of, to know that they’re not actually gonna give you answers because nobody has the answers but they’re not gonna posture, you know?
SHIKHAR GHOSH: Right.
ADAM ENBAR: They’ll ask tough questions that make you see it in a different way. So having a peer-
SHIKHAR GHOSH: Knowing that they are going through the same thing.
ADAM ENBAR: It’s unbelievable.
SHIKHAR GHOSH: You’re not the only one, yeah.
ADAM ENBAR: It’s the same thing. It’s, you know, it’s such a lonely journey being an entrepreneur. It’s so hard. It’s so hard. It’s so hard. I can’t say that enough times. But knowing that other people are suffering just as much as you are for some reason makes it easier.
SHIKHAR GHOSH: So, why are you an entrepreneur?
ADAM ENBAR: You know, when I started Flatiron School, I didn’t set out to be an entrepreneur. I was working at Venture Capital and I’ll be honest, people say, you know, “start a company that you’re passionate about or, you know, go solve a problem” but I just felt like I wanted to be an entrepreneur for a long time. So even while I was in business school, I was ripe, you know, I wrote a business plan for a hearing-aid distribution model and I got funding offers and I was like I don’t wanna do hearing aids.
And then while I was HubSpot I was constantly thinking up new ideas and scheming with my friends and my classmates. I’m like, “let’s start a company that does this.” And then, you know, when I started working in venture capital, I was always passionate about education personally and so I said “okay, I’m gonna go out and invest in education companies and I couldn’t find anybody doing anything interesting in education.” But I met this one guy that was teaching people and getting them jobs and it blew my mind, it solved so many problems and I said “you have to start a school, I will invest in it” And I was trying to convince him to do it and he thought I was crazy to the point where I said, “you know what? Like, this is too big of an opportunity, this is the thing I’m passionate about. If you’re not gonna do it, I will quit my job and do it with you.” And that’s how I got to it. And I think-
SHIKHAR GHOSH: And he was your business partner?
ADAM ENBAR: He’s my co-founder, we’re– yeah. We still work together today. And I think most, um, you know, most companies and entrepreneurs have founding stories of a similar flavor which is– there’s a real reason I’m connected to this and there’s a real reason this moves me. Um, and to be honest, that’s one of the things that VC’s look for in companies. You know, VC’s like to say that they have, you know, these niches, like we’re an expert at community marketplaces or we’re an expert at social mobile whatever. It’s kinda nonsense, right? At the end of the day they’re just looking for the best deals. It’s like if this is gonna be a rocket ship, I don’t care what industries it’s in. I wanna put money in, um.
SHIKHAR GHOSH: They’re searching in that area.
ADAM ENBAR: Yeah, exactly. Maybe I can have a more intelligent conversation with an entrepreneur in the cryptography space if I’m smart about it, right? But it’s just about a competitive manage. They’re all looking for the same thing. They want a great team. Great team, big market, great products and reasonable deal terms, right? And if you just have the first one, a great team, you don’t need the rest of the three.
If you have a, you know, a pretty good team and a giant market then you don’t need the other two. If you have so– like, that’s the order of importance. And what makes a great team, what makes a great founder, I’m pretty sure it’s three things. From what I’ve seen in Venture Capital. They’re looking for people that are smart, ambitious and relevant. So smart means however you define smart, people have different ways of defining smart. Some VC’s will look at pedigrees, some will look at, you know, past whatever, you know, smart.
Ambitious is what we talked about before. [It] is that they want you to swing for the fences. They’re not satisfied with the 50 million dollar exit. And then the third thing is relevant, which is there’s a lot of smart and ambitious people going after the same market with a similar product idea, why are you gonna win? And so that key, that “how are you relevant,” that “why is does this problem speak to you?” Because at the end of the day when it’s that hard, you know. Sure, you know, if you’re tied to the industry you might have some unique insight but that goes away pretty fast. Right? Okay, so I was passionate about education. So I studied the industry. Other people can study the industry but it’s really about, like, that connection that’s gonna keep you motivated and keep you going when it gets as hard as they know that it gets. That’s what VC’s look for in every case.
SHIKHAR GHOSH: It’s all about dopamine.
ADAM ENBAR: Yeah, it’s, you know, my– One of the things my co-founder told me early on was that, you know, the scariest part of this journey is that, you know, they say it’s a rollercoaster that you’re, you know. One moment you’re on top of the world and then one moment you’re pits of despair and you think what am I doing, I’m such a fraud? The scariest part is not that that happens, the scariest part is that it happens within the same day and, in between, nothing’s changed. It’s just that kind of a ride. Um, and so it’s hard to stay motivated unless you’re really connected to it.
SHIKHAR GHOSH: Yeah, you go from zero to 300 people. Uh, you’ve had to hire a whole bunch of them, how do you think about hiring? You know, what’s your process? What have you done right, wrong?
ADAM ENBAR: It’s so hard. So, so my wife is the head of HR at a company called BirchBox which is started by a section mate of mine.
SHIKHAR GHOSH: Right.
ADAM ENBAR: And she’s had an entire career in HR. She did HR recruiting here at HBS when I was a student. She did at Oliver Wyman and so she built her whole career in recruiting and I’ve tried so hard to learn how she got so good at it. It’s incredibly difficult. I’d argue that, you know, I think you– I summarize my job as CEO and do three things, you know, setting the vision, out getting resources, and hiring and retaining a team. And that third one, hiring and retaining a team, is probably the single most important one, the single hardest one, and the one that I relatively spend the least amount of time on, given its importance.
SHIKHAR GHOSH: And you’re probably, you know–
ADAM ENBAR: Right now I’m at about 25% of my time is spent on recruiting.
SHIKHAR GHOSH: And how much do you think it should be?
ADAM ENBAR: If I’m doing a great job, probably– I mean, depends on how fast you’re growing but today it should probably be over 50 because there’s, you know, especially as you’re growing there’s only so much you can do.
SHIKHAR GHOSH: Yeah.
ADAM ENBAR: Right? And either you’re bringing great people on board and, you know, if there’s anything I’ve done well it’s make sure that I’ve hired people that are smarter than me in every job they have. My COO, she’s, she’s smarter than me in everything she does. I can never do what she does. And that’s true of every executive on our team. They’re just way better than I could ever hope to be at that thing.
And, you know, it’s amazing. I was reflecting on this the other day because in a leadership meeting. We were talking about our need to recruit and our need to recruit talent across the organization and how everybody needs to start being a recruiter and one thing I mentioned to the team– I said, “look around, not a single one of you came here through a job posting or an executive search firm or recruiter or anything like that, it was all through our network.” Through, you know, going and reaching out to people on LinkedIn and going to events and just finding a way to find the absolute smartest people. And that’s true of literally every single executive on the team, everybody in the room was through channels like that of, of just, you know, clawing and scraping and trying to find the best people and–
SHIKHAR GHOSH: And you know, you, you’ve done that. Right? So obviously since all these people are there. How do you do that?
ADAM ENBAR: Yeah and so I was trying to encourage them to do that.
SHIKHAR GHOSH: How do you do that?
ADAM ENBAR: I mean, you know, you just have to hustle. Right? So for example, our COO that I keep talking about, she joined when we had 10 people and I had no job posting for COO, I didn’t know what, you know– I didn’t think I needed a COO. I was looking for a head of marketing.
And, you know, one trick I learned in venture capital was if you wanna get to know great people that are worth investing in and every meeting with who’s the smartest person you know and are you willing to make an introduction? In any field, by any definition of classically smart, business smart, whatever.
Who’s the smartest person you know, can you make an introduction? I wanna have coffee with that person. And so I’ve met a lot of interesting people that way, um, and so, uh, after we raised our first round of financing, I– one of my hires was a head of marketing, a VP of marketing, and so I started reaching out to all the marketers I knew that I had been introduced to from that question. And one of them that I was trying to recruit said, “look, I’m not looking to leave my current company but one of my one of my former colleagues might be interested” and I met Christie and she was obviously, you know, she wasn’t even a marketer in her background, but she was one of those people that could obviously be successful at anything.
And so I said, “alright, I have to, you know, move Heaven and Earth to try to recruit this person.” I remember at one point I called her and I said, “do you wanna get coffee tomorrow morning?” And I think she half-jokingly said, “well, I’m taking a train from Penn Station to Baltimore and eight AM so unless you feel like meeting at Penn Station at seven, we’ll have to do it next week.” I said, “perfect, I’ll meet you at Penn Station at seven” and that’s what I did. And she clearly was not a marketer. She was [more] senior than that so I said “okay, come be our COO” and she, you know– Somehow, kind of we convinced her to join the company and then, a few weeks in, she said that she renegotiated her equity package and I gave her everything she asked for because when, you know, your ability to grow or do anything meaningful is 100% dependent on your ability to bring on the best talent. And you literally have to do whatever possible to make that happen.
SHIKHAR GHOSH: And in the bringing on of talent, you know, people think about a formal process, right? You’re sourcing and then you’re interviewing and then you’re doing reference checks and so on. Iit doesn’t look like you’re doing that.
ADAM ENBAR: Yeah, I mean if you’re scaling, right, if you’re sales team is going from 10 people to 200 people, sure, build the processes, right? If you’re looking to build your core team or you’re looking to make a key hire, like, those people are not interviewing for jobs. Right? Think of the most talented person you know, they’re not fixing their resume and submitting it online. It’s never gonna happen.
You just have to go out there and you, you’re selling them, right? This is, you know, I think at the top of almost any profession but certainly as a CEO, the majority of your job is selling. Selling your company to investors. Selling your vision. Selling to partners but selling to talent. Convincing the best people in the world who have no business coming and working for you to do this job. And, yeah, you should be getting talent that’s way, way, way out of your league. That’s what makes the difference. And yeah, it’s not just gonna happen, right? Because these, you know, these people are being pursued by everybody else and so you have to ask yourself, well why are they gonna come work for me? So you have to be really humble and work really, really hard, show them that you care and that’s why it demands so much time and attention but that’s what makes a difference.
SHIKHAR GHOSH: Thank you very much, this was really, uh, great and, yeah, what’s really fascinating about you is you, you’ve had so many different types of experiences in the whole entrepreneur legal system and so it’s great to see, you know, a perspective that’s fresh.
ADAM ENBAR: Thanks. Thank you. I definitely could not have done it without this education.