← From the Ground Up
From the Ground Up
How a Near-Death Experience Inspired This Founder to Revolutionize Office Lunch
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- [00:02]
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Diana Ransom
Diana Christine so tell me, what's your go to office lunch?
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Christine Ligorio Chavkin
If I'm buying?
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Diana Ransom
Yeah, just whatever.
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Christine Ligorio Chavkin
I will take something from home and sadly put it in a plate and try to eat it at my lunch while I'm typing away.
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Dalip Rao
That's good.
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Diana Ransom
How many days a week do you remember your lunch? Cause I feel like I make my lunch and then I just leave it sitting on my counter at home.
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Christine Ligorio Chavkin
Oh, that's exactly what I did today. I forgot my lunch so I didn't eat lunch and then you reminded me to eat lunch.
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Diana Ransom
I'm hangry.
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Christine Ligorio Chavkin
Let's have steak and lobster. This is from the ground up. I'm Inc. Executive Editor Diana Ransom and.
- [02:02]
Diana Ransom
I'm Editor at large Christine Ligorio Chavkin. Today's Episode Scaling the Office Lunch.
- [02:14]
Christine Ligorio Chavkin
So Christine, for today's episode I spoke with Dalip Rao, who's the founder and CEO of a company called Sharebite. Have you heard of Sharebite?
- [02:21]
Diana Ransom
I have heard of Sharebyte, mostly because you wrote about Sharebite for our Inc. 5000 issue. That's right.
- [02:26]
Christine Ligorio Chavkin
They were number 56 on this year's list. So. And they grew their three year revenue by some gargantuan amount of money. Their revenue growth was about 4 over 4,000% over three years. So doing gangbusters. But yeah. So sharebite what they do is they do basically like your standard corporate food ordering platform, but they've also they've mixed in an HR element. So that it's basically like if you could think of your lunch every day as a benefit. Oh, interesting. Like healthcare.
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Diana Ransom
Yeah.
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Christine Ligorio Chavkin
Or the gym membership.
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Diana Ransom
So how does that, like, how does that work if you're an employee of a company that uses Share Byte?
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Christine Ligorio Chavkin
Well, they have different kind of strategies. So one is like you would just tell the office manager, you just, she sends out a link and then you, you say like, okay, we're ordering from sweetgreen today. So they have, they work with a number of different vendors. Especially they work with local vendors depending on where you are. So like a couple of like Nashville vendors in Nashville, sort of local places in New York City too. So you would just order like do like a group ordering if you want, and then your company would subsidize a portion of that meal. So therein lies the benefit.
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Diana Ransom
Okay. But it also, like a remote worker could take advantage as well, perhaps.
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Christine Ligorio Chavkin
Yeah, it was, we're going to get into that during the interview. But you know, definitely they've grown a lot in new ways. And that's one element that they've grown that's amazing.
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Diana Ransom
So this company sort of took off like out of the pandemic. Why are we speaking to them now?
- [03:50]
Christine Ligorio Chavkin
Yeah, so I've actually spoken with Dilip a couple of times. You know, the first time I talked to him, I wasn't actually able to utilize one part of his story in the piece that I wrote. And it just stuck with me. It's like the kind of thing that just kind of sticks with you. And you're like, this guy's story is so incredible. And the fact that they were on the Inc 5000 this year was like, now here's my opportunity to tell this guy's real story.
- [04:14]
Diana Ransom
So, okay, you have to tell us the story now.
- [04:17]
Christine Ligorio Chavkin
Let's let Dalaib tell his story. But first I started the conversation with him by asking how he talks to clients about food as a benefit.
- [04:27]
Dalip Rao
It depends on the customer. We segment the customers, the clients, so to speak, across really two different buckets. Right. So one, and then, you know, there's other separate buckets thereafter. But the primary bucket is do they already have an employee meal program? If they do, the decision's a bit of a no brainer because they see our technology, they see who else uses us. Of course they see the technology. And it just kind of blows their mind that we've literally thought about everything and then they look at our back end, they ask all these odd questions. And it's funny to listen to these calls once in a while and they Say, well, this is a bit of a crazy idea, but do you have this? And then it's like magic, right? Someone on our account management team says, hey, Diana, go ahead and hit refresh on your browser. And it's there because we've thought about it. We've got thousands of different features all built out. So it's really about what you want and we just turn it on for you. It's amazing.
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Christine Ligorio Chavkin
So what are the, I mean, in the realm of things that you have thought about already? When I was writing the story for the Inc. 5000 issue about your company, I kind of personally went down the rabbit hole on can you actually, like, is this an IRS sanctioned kind of thing? Like, can food be a benefit? And is that one of the things that you have quote, unquote, thought about?
- [05:53]
Dalip Rao
Again, not allowed to offer tax advice here. So I'll leave that caveat. The question rarely ever comes up among our customers because they, they're sophisticated enough. Most of them are large enterprises with large enough accounting and legal functions that they've figured it out already. So the question about taxation rarely ever comes up for us. It's more about like, do you have the feature set? Much of the conversation nowadays is largely carried out by either HR or what's called total rewards or benefits. Or there's this other function known as workplace, right. Employee experience or workplace experience. Those folks tend to know this space, like inside out. And so whenever our team ends up meeting people among those groups, we have an honest conversation with them. And so the thing that's come up largely over the last few years, we're in this high interest rate environment. Even though the recent rate cut announcement, in a high rate environment, people are not willing to spend as much money. But what's been interesting is the best companies and the best CFOs really bifurcate the outlay of cash flow between expenses and investments. They hate expenses, but they love investments. And so what's largely been happening, and we're at the forefront of it, is a conversation around benefit utilization rates. And I've learned a lot in this category too, because if you talk to HR leaders and benefits total rewards leaders, you ask them, like, what's the successful benefit that you've implemented? And you know, with respect to utilization rates, they'll tell you, hey, if we have a, I don't know, 7, 8% utilization rate, that's, that's a good, that's a successful outcome. So that's like a bit of a head scratcher to me, right? Because like, what do you Mean, well, you know, we offer standard benefits, you know, medical, dental, and, you know, vision, et cetera. But then we have all these other benefits, too. But our struggle is that it's not utilized. We're paying for it. Some of the best companies, one particular that I was recently, over the summer, I was at the office of in New York City, a company that I personally very much admire. They pride themselves on being a great place to work, right? Visionary founder, et cetera. And their chief HR officer said, hey, we have very good utilization rate. What does that, in terms of numbers? What does that translate to? It's like I'm 20%. That's pretty high in the benefits world. Anybody who's in the benefits total reward space listening to this will concur, they'll agree. Meal benefits have a 95% utilization rate. It literally puts every other benefit that any company offers to Shane and from different perspectives, right? Because today every company is looking at maximizing its return on invested capital, and they're also looking at the benefit bundled benefits programs where they're offering, I don't know, pet insurance. Not everybody's got a pet. And those who have a pet may not necessarily want pet insurance. Adoption benefits, nothing wrong with it. But I've worked at a lot of companies that have offered, and I know a lot of companies that do offer that. Not everybody adopts a child. Right. It's a great offering. We ourselves used to provide our employees. I believe we still do a gym subscription, right? Like a monthly, whatever. There's literally two people on our team using it.
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Christine Ligorio Chavkin
Oh, no.
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Dalip Rao
And so it was really this. This stuff that we have observed with our customers. I saw it going down in our own and our own company because our head of finance and our head of HR on a call being like, why are we paying for this thing? There's only two people using it. It's bundled, right?
- [09:57]
Christine Ligorio Chavkin
So, but food, they. Everybody. Everybody can get down with food.
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Dalip Rao
Correct. Everybody eats from the lens of maximizing not only return on invested capital, but utilization rates.
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Christine Ligorio Chavkin
Right?
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Dalip Rao
You're offering a meal stipend. People are going to use it. And you can offer the meal stipend through our technology for different reasons. So some of our customers say, well, you only get the meal stipend if you come into an office.
- [10:23]
Christine Ligorio Chavkin
Well, I wanted to ask you about that because the timeframe that we're looking at for the Inc. 5000 really centered around that era. So you have a company that largely, if not primarily, focuses on providing food for people in an office. How did you grow so much when people weren't actually in an office.
- [10:43]
Dalip Rao
When we started building Sharebyte, you couldn't go to companies and say, hey, we're an employee meal benefits platform because they would have malfunctioned. What do you mean by meal benefits? Right. And so we had to kind of take this approach, you know, X for Y, for example. Right. Like Airbnb. Right. When Airbnb initially started off, you had to be a hey, we're the Expedia of short term rentals. And then the question was like, why in the world would I rent out my living room to some random stranger to come stay at? And here we are, right? Multibillion dollar publicly traded company, category creating company. But that's a period that is very difficult for companies that are essentially in this category creation phase. So there was a company, or there is, if you want to still call it that, there's a company called Seamless back in the day, which now is part of grubhub, that originally pioneered food at the office, kind of digitization of that. Right. So they went and signed up a bunch of law firms and a bunch of investment banks and suddenly became such a household name. And then they merged with grubhub not that decade or so ago. That company is the one that I remember using back in my banking days, my investment banking days, because you stay late at the office all the time and you get a meal stipend, so you order your meal through that platform. And I remember seeing that and wondering, like, there's a way better way to do this. And so there are these observations that sort of you take away from seeing that, being a customer, talking to administrators, talking to restaurants, and then you realize, like, nobody likes this company. Why does it still remain in business? And so I remember in the early years, like I probably approached 300 plus different investors. Probably I stopped tracking after the first two, 300. But every single person, they did the whole like, let me know how I can be helpful. But they weren't investing.
- [12:56]
Christine Ligorio Chavkin
Thanks, but no thanks.
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Dalip Rao
Yeah, thanks but no thanks. That's like the VC talk of like, get out of my office. Right. And I remember being so frustrated because I was like, look, I don't understand. I'm trying to do something life changing for the country. We're trying to do something just that's going to materially. There's this old saying, I don't know who it's attributed to, but one tried and tested way of creating wealth for yourself is to be number one, non consensus. Correct, Non consensus, Right. And then number Two, to give people what they've always wanted but don't yet know how to get at scale. And I really felt that what we were building at Sharebyte checked both of those boxes, like in a material manner, right? So I remember being confused. So I was like, maybe I'm the problem, right? Like, I mean, that's always. I always make myself the problem. So like, I'm like, I'm not communicating this properly. Can we talk? Can we talk again? Nope. And the recurring theme was, listen, man, I've had like 20 of you show up in the past few years and tell me that they're going to go build the next quote, unquote seamless. And I haven't heard from them again. And these are like, whatever, right? Smart people, like Ivy League, whatever, MIT and whatever. They've never been successful. So, like, ah, you know, I like you a lot. You got a great, you know, background and story and you know that your near death experience is crazy, but let's stay in touch. And so, you know, I remember scrounging together like really, really small checks from whoever would listen to me back then. And I don't even think they all thought I was a bit crazy because. And some of them are open to telling me that nowadays because they're like, wait a second, you're going to go get every worker in America fed? All right, I'll throw you a check, but it's not going to be big. So we took all these, like small checks and scrounged together whatever cash that I was able to put together back then and started building this thing with this mission and focus. The mission is what dictated the business, right? Oftentimes you hear from companies that they're mission driven, but it's the business that typically dictates the mission, right? We're going to be the best so and so. But for us, it was like not just a mission as a company, it's a broader societal mission. It's what's best for the country. What's good for sharebud is good for every worker in America. If I'm right about this, if we're right about this as a company, we do all right. But we have this unique opportunity to redefine not only this entire category, define and then redefine, but materially impact not only every worker in America, but their families. Right? Because if you take a cross section, I mean, there's 44 million Americans that report being food insecure. That's like a devastating number. And then there's this other unreported or underreported number because of the stigma associated with saying like, hey, I'm hungry. The numbers probably double that, you know, multiples of that and we will never know. Food insecurity tends to become this like, you know, political tennis or whatever, pickleball nowadays, right? A political pickleball where it's kind of, it's like, well, it's that guy's fault, right? And I know it's this guy's fault, this person's fault. And so you've got the political institutions in the country, one attempting to, if they got hold of it, attempting to make this into a government program and another that is unwilling to acknowledge that the problem even exists. And the thing is like, it doesn't have to be partisan or bipartisan or this is a nonpartisan. This is something that impacts every kind of person, every state, no matter who they vote for, where they typically tend to vote. Like, food insecurity is a national security problem. And if we don't solve that today, it's going to be devastating for the next decade or so.
- [17:12]
Christine Ligorio Chavkin
And I guess the larger point is that this idea of food insecurity doesn't go away just because people were sent home during the pandemic.
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Dalip Rao
Oh yeah, it got worse.
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Christine Ligorio Chavkin
How did the company kind of transition over that period?
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Dalip Rao
It was interesting because we built the software and the platform behind it and we started to get some early Successes. Starting in 2018, we started winning these major, major enterprise customers. Vault 50. Law firms, private equity firms, hedge funds, investment banks. The business is doing really well. Business is going great. We're coming into the office high fiving each other. It was like a party. Because last week was our best week ever. And by the way, this last week was our best week ever in the company's history. That used to be the cadence. Every day, every week felt like, wow, we're hitting new highs, new customers. We had a backlog of customers waiting to be onboarded. And then this pandemic hits, not even just a few weeks later. But I mean, I remember closing up that office on March 12 and looking around saying, something tells me I'm not going to see this place again. And that's what happened, right? So we sent everybody home. And then that Monday, that upcoming Monday was the first day of the lockdown. The first week we didn't see as much of an impact, right? I think other people were a bit delayed. Our customers were delayed in sending their workers home. But then the following weeks, business literally went to zero. And then a couple of weeks later, I Started getting emails and phone calls from customers first. I'll never forget these things because on March 16, the first day of the lockdown, while everybody else was kind of figuring out how to survive, how are we going to do this? Our team, the first thing that we did was we reached out to restaurants. As you know, we told them, hey, look, we don't know what the world's going to look like, but we're not going to charge you anything. So whatever transactions come through, we'll just send it over to you. Just to support small businesses in a time of crisis. Then I started calling up some of our largest customers and saying, hey, it's time of crisis. How are you all doing? How are you managing? And then we started to hear like, hey, we're all fine, thankfully. But are you guys doing anything to help first responders and frontline staff? We want to help. And you know that story from a few years ago. So, yeah, so our business had gone to zero, but what we started to do was pump all of this volume to restaurants for free. And they were doing these large, large catering.
- [19:55]
Christine Ligorio Chavkin
They were helping cater to, like, first responders, Correct?
- [19:58]
Dalip Rao
Yeah.
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Christine Ligorio Chavkin
Through the sharebyte platform.
- [20:01]
Dalip Rao
Correct, yeah. So we were just donating our platform or technology for the restaurants to kind of communicate with the hospitals and the frontline staff. And I remember getting a call from one investor in particular. Well intentioned, of course, but on April 6th of 2020, I remember every day.
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Christine Ligorio Chavkin
I think that was the day the cares act came out.
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Dalip Rao
Yeah. Was it? Was it?
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Christine Ligorio Chavkin
Well, that might have been. Also been the day that the Care act ran out of money. I remember April 6th being a very significant day.
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Dalip Rao
Okay, April 6th is the day I got the call from this investor and basically was like, hey, how are you doing? But then didn't allow me to even respond. Is like, hey, I got to run. But really quickly, you should fire and furlough everybody for that feedback. I don't think that's the right move for us. On April 7, I ended up having a call with the team. It was a zoom call. And I remember seeing these, like, flushed faces on. On, you know, on that call, wondering, like, this is if this was it. Cause, you know, you see, volume has. The only volume that we're doing is a pro bono work. And I remember telling people, like, I've taken a zero salary. Just so you all know, the management team has also reduced their salaries. We've been hit by a tsunami. We need to rebuild. We're going to bet on ourselves because there's a team Worth betting on all day long. This is a very vulnerable, open conversation. And I remember saying, like, we're going to get through this together. We're going to stick through this. Everybody has a job. This is a team worth betting on. So all that I've asked of you is that you prove me right. And man, this team got to work and going back to that period and then left New York, moved into my in laws basement in Louisville, Kentucky. And remember sitting down with our engineering team being like, we're going to accelerate our product roadmap. And there was these, like, crazy ideas in collecting cobwebs in our product roadmap, and we're going to build every one of those. And so by September, the business had not only come back, because now, you know, companies were starting to kind of like, come back. Like, WeWork was one example where they were like, whatever we got to do to bring employees back, hey, is food going to do it? Okay, we'll try anything. So they took a shot and then you started to see other companies start to follow suit.
- [22:37]
Christine Ligorio Chavkin
They were using sharebyte to convince people to come back to the office.
- [22:41]
Dalip Rao
Yes. So that was the inkling for us. We're like, wow, that's a mechanism. So suddenly, restaurants that had closed up their locations, Suddenly we're getting 75, 90, 100 transactions all in one order. They're like, hey, how do I do this every day? Because I'm going to open up a location for you.
- [23:02]
Diana Ransom
All right, let's stop here for a minute. Return to office remains a big point of contention between founders or CEOs and their workers. Amazon just announced that its offices will be back to five days a week this next year. Do you think a meal program really makes a difference for.
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Christine Ligorio Chavkin
Absolutely.
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Diana Ransom
Okay, tell me, tell me what you think here. Like, because I feel like it's a nice to have, but it wouldn't get me to come in necessarily, just knowing that I had a free lunch.
- [23:32]
Christine Ligorio Chavkin
Well, I mean, it's probably not going to work for everybody, but in many instances in the Sharebrite experience, it has worked.
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Diana Ransom
Yeah.
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Christine Ligorio Chavkin
So, I mean, it's just like an extra incentive. So there's all these big bosses are sitting there thinking like they're. How can I get my workers back in? I mean, there is a carrot and a stick approach. Yeah, this is. This is the carrot approach. The stick approach is you a lot more onerous. So I'd rather have the carrot approach. Yes. Feed me and maybe I'll come in. So give me a reason to come in and I think that sharebrite kind of presents that for a lot of companies. Yeah.
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Diana Ransom
And I think it does give a company kind of a feeling of, oh, I'm playing with the big guys. Right. Everyone knows Google has free lunch, right? Like, wouldn't you want to be like that if you're a scrappy tech startup?
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Christine Ligorio Chavkin
Yeah, absolutely. The more you can level the playing field, the better.
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Diana Ransom
Yeah, absolutely. So returning to Dalip, he was describing how he was getting turned down so much when he was starting the company. How did he turn that around?
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Christine Ligorio Chavkin
Well, like many founders, Dalip has the type of personality that can sustain all those rejections. You know, they pushed through the challenges of starting a business, but his path getting there was unique. When we come back, I'll talk to Dalip about how his entrepreneurial journey started. But first, a quick break.
- [24:51]
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- [27:35]
Dalip Rao
Entrepreneurship is one of those things where the more of these that you get to meet, you'll get the sense that they've been through some crazy things in life because, you know, building a company as an entrepreneur, it's a lonely path. And then if you're a founder CEO, it gets even lonelier because there very few people that understand the challenges. Yeah.
- [27:55]
Christine Ligorio Chavkin
People to people don't necessarily understand everything that you're going through.
- [27:59]
Dalip Rao
Correct. Yeah. And it's tough to explain. And so you just kind of, it becomes very lonely and insular and you kind of got to talk to yourself in the mirror sometimes. You know, it's. I don't. I think other founder CEOs listening would probably be like nodding their heads right now.
- [28:15]
Christine Ligorio Chavkin
Yeah.
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Dalip Rao
For me, the entrepreneurial journey actually started at a very young age, I think. First business attempt that I had was in the fourth grade because I kept asking my parents for a Nintendo. My dad for whatever he could afford at the time, just thought any video game would do. So he bought me an Atari 7800. I loved that thing for like a month. And then everyone else had a Nintendo, okay. So I kept asking, oh, I want a Nintendo. And I finally gave up. But so there's a classmate of mine who had a Nintendo. So I made it a point to go to his house, right? So it was like, hey, I'm going to go to his house, I'm going to do homework there. But selfishly, I'd finish my homework quickly just so I could play Super Mario Brothers with them or any other Contra 80s kid. So. And then I got this like a harebrained idea that like, what if I played this video game at my house and my mom would. So I asked my mom, can I have friends over? She's like, oh, sure, I'll make some snacks for them, right? So these Indians, she made these Indian snacks. And then so I went to, you know, his house and my friend's house and said, asked his mom if I could borrow the Nintendo and play it at my house. And anyway, the short of it is that I invited literally every kid from my class into this like, small, smallish basement that we lived in in Queens, New York. And I Charged them all, like, you know, a quarter, 50 cents to get inside. And I did that a couple of times. And then I gave that money to my mom, thinking that she would feel proud, except she was scared. Late 80s in New York City. Wasn't exactly a safe or great time to kind of live there. And so she thought I was kind of getting into the wrong crowd. So she's like, where'd you get this money from? And I go, I'm running a business. She goes, absolutely not. So she shuts my business down and she goes, no more friends at home. Right? And, like, no more video games.
- [30:21]
Christine Ligorio Chavkin
The regulator clamped down. I love it.
- [30:23]
Dalip Rao
Yeah, my first failure, right? Yeah, exactly. The regulator came down. I had other things like that. Right. Throughout the years. I sold computer parts in high school. I don't know what kind of trust my parents had in me, but they dropped me to this guy's house at like 5am I'd get in a truck with him and drive out to like, King of Prussia to do a trade show. And the guy would pay me a couple of bucks to kind of like just go with him, lift boxes, sell parts, and then drop me off at like 8, 9 o'clock at night. So we do these day trips. So. Always very entrepreneurial. All because I never wanted to be an inconvenience to my parents financially. We didn't have much. I used to say, like, I grew up with nothing. And, like, that's actually a patently false statement because, like, I only meant that from a financial standpoint.
- [31:14]
Christine Ligorio Chavkin
But, yeah, like the material things.
- [31:16]
Dalip Rao
Right, material things. But I look back at my childhood, like, we didn't have much, but we were so happy. We were so grateful to be here. Right. And. And so I used to. I say that. So I think it's a patently false statement that I grew up with nothing because I grew up with a tremendous amount of wealth. But it came in the form of two parents.
- [31:38]
Christine Ligorio Chavkin
Well, right. So why would you. Why would you pursue a business knowing that you're, you know, it's a risk to start a business.
- [31:45]
Dalip Rao
Yeah. You're getting into the whole Indian upbringing too, because growing up you're always. We were always told you really have three choices in life. Engineer, doctor, failure. Now the, you know, aperture has widened quite a bit. Right. So, you know, but those were the choices growing up early on. And they weren't like hard choices. It was just like, my parents were always very soft on that. So they would say, it would be nice if you became an engineer. So, yes, I went and checked the box. I studied engineering, didn't appreciate it for what it really taught me, how to see the world until many years later, until building sharebyte. Risk taking from that standpoint, growing up, it was like we already took the biggest risk that we could, which is coming to this country and leaving behind everything that we had in India. So now don't take any more risks right now. Just like do the incremental stuff, right? Go get an education, study hard, don't worry about any household related worries. And that type of upbringing makes you kind of risk averse. So when every time my parent, my mom at least saw that I was taking these risks, it was like clamp down, right? Regulators saying no more. So my only choice at the time was like, okay, well I'm going to just check the box and do what you say. Go study engineering. Didn't really have my heart in it, but I did it anyway. But I always wanted to be in business. And so the circumstance, what really led to me even getting a job and on Wall street, because even back then I didn't really belong on Wall street. Because the typical path is you get recruited out of a target school, an undergrad or you know, somebody in it, you get an internship and then you get invited back for a full time offer. I didn't do any of that, right? So I walked in through sort of the back door interviewing at Goldman Sachs as like a temp, as what they call a contingent worker. So my view was it was very simple. My parents made a lot of sacrifices for me growing up and my sister. And when my dad lost his job about 17 years ago, we were thrust into a financial like, you know, there's a lot of financial burden, right? So there's. And I had to step up literally overnight and become sort of the head of household. And I didn't have anything, right. I didn't have any direction on where I wanted to go, right. There's a recent quote that I was reading, like, if you don't know where you're going, any path will do. But I was always very ambitious. But I just didn't know which direction to go. I just knew I wanted to be in business or learn about business. So when my dad lost his job and the company he worked for went away, that to me was like the reality, not only check, but like complete, like slap across the face where it's like, wake up. You've lived under this like false pretense of like financial security for no reason. Now look, you have to be the head of household and Go take care of your parents. And that was the reality check for me where it's like it was the kick in the behind where I now need to take care of my parents. They made these sacrifices for me. I'm not going to let them down. So I was willing to do whatever.
- [35:01]
Christine Ligorio Chavkin
Well, yeah, I mean, you mentioned a near death experience earlier in our conversation. So what happened there?
- [35:07]
Dalip Rao
Yeah. So fast forward 10 years ago, 2014, after all these challenges, you know, the first five years of my working career, I literally saved up every dollar that I made to make sure that I took care of my parents. I used to beat myself up being like, well, I don't have anything to show for the first nearly five years of my work, but I did, which was a smile on their faces and a roof over their heads and not a single worry on in the world. So life was going really well. Got married, moved to la, had just come back. In banking, when you have mentors and sponsors like the ones that I did, that was grateful and very fortunate to have had, every couple of years you get this opportunity to leave and go join private equity or event driven hedge fund. Every time I had the opportunity to leave, somebody at the bank would say, hey, do you want to come work for me? Come back to New York, come do this. I got invited back from la, back to New York and a few months afterwards, this is in early to mid-2014, a few months in. If Diana, if you had asked me on July 4th of 2014, tell me about your life. Couldn't have been better, right? I was happy, loving it, like what a privilege, what a. How grateful am I, like, overcome all these challenges, you know, financial and existent, all these other things, set my family up for success. They don't have to worry about money. And then a day later on July 5, 2014, I'm crossing the street, going to the gym, minding my own business. I have a walk sign. I'm on the crosswalk. It's a quiet Saturday morning and an 87 year old comes speeding down 54th street and then, and then turns onto Second Avenue. And you know, I have a lot to say about New York City traffic. A walk sign is not a walk sign. Public service announcement. It literally means dodge traffic. I get hit by a car, my head goes through the windshield, I go flying off the car and I got taken to hospital and I wake up at the hospital and I can't feel anything from the neck down. It's like I can't move my arms, I can't move my limbs. And I start to go through the worst case scenarios in my head. And so I remember life is too short. I'd heard life is short. But like, this is crazy, you know, I had much more to go, I had more time left. And then you get into like all these other higher order kind of things where it's like, well, what's my life worth? What purpose have I served? What problem in society have I helped solve? What am I worth? Like not like from a financial sense, but like what? Like in Indian philosophy and tradition, it's like kind of beaten into you in a nice way from a very young age to be useful, to make yourself useful.
- [37:55]
Christine Ligorio Chavkin
Right. But suddenly if you're not able to use your limbs, for instance, how are you being useful?
- [38:00]
Dalip Rao
Yeah, exactly. And so I remember saying to my wife and then the nurse at the time, like, hey, this has been fun. I don't want to live like this if this is how I'm going to be, if I'm going to be incapable from the neck down, I don't want to live. I reflected quite a bit on that moment, this year in particular, because this July 5th was the 10 year anniversary of that. And I, and I didn't think I'd make 10 minutes after that. So, you know, when you have this second, third. I don't know how many chances at life I've gotten, but this one was different from all the other difficulties that I've faced in life because this is physical. Like I may not be able to move, I may not have my sort of the faculties that I tend to take for granted every single day. So, yeah, so this is one of those things where it's like, if I got another chance to live a normal life and do the things that I tend to take for granted, I'm not sure what I'll do, but I'm going to try to figure out something. And to me, I always knew that building a company that strives to be a force multiplier for good things, right. Societally, it's something that I was always excited about. Every company that I'd saw, there have been companies that have been popping up here and there, Patagonia being one, Maury Parker, et cetera, where they had one thing that they wanted to go and accomplish. Maury Parker is one of those examples. You buy a pair and you give a pair, someone else who needs. Yeah, you give a pair. But what I realized is when you start talking to people that buy the eyeglass, they're not really thinking about the impact. Sure, it feels good at the time of purchase, but like not the second year that you're wearing the glass. You're not putting those things on and thinking like, ah, this pair donated to, you know, one to one and eat. Not saying there's anything wrong with it. Right. I truly admire the company. Big fan. But I said, you know, the thing about food is that it's a consumable. You do it all the time. And if you marry that with this like permission and purpose, like there's something really important that we can go and accomplish. And it's an experiment, let's see if it works. And so.
- [40:16]
Christine Ligorio Chavkin
So you knew at that time you wanted a deeper meaning in your life.
- [40:22]
Dalip Rao
Exactly. And I'd be lying if I said, you know, I thought about the business that is shared by today, but I certainly thought about the mission. The really the purpose of helping align the incentives for the private sector to undertake the burden of public good is something that's very near and dear to me. Right. And I don't think I'll ever start another company again. But if I was crazy enough to do it because, you know, there's still so much more to go here. But if I were ever to start anything else, like, I don't see any other way to build a business. Right. That a business has to be built for the public good. It has to be built for the country. And so suddenly nowadays it gives me a lot of pride and a deeper meaning, seeing a lot of other entrepreneurs saying, hey, I'm building a company for the betterment of the country. Wow.
- [41:11]
Christine Ligorio Chavkin
What I loved about your, I mean, I love your story, first of all, and I'm so grateful for you for sharing it with me and our audience.
- [41:18]
Dalip Rao
Thank you.
- [41:19]
Christine Ligorio Chavkin
When you had a LinkedIn post, in your LinkedIn post about the Inc. 5000 announcement of your company, you had this line in there that I just, it just like stopped me in my tracks. And I think it sort of speaks to your own experience of having this near death experience. And I feel like people, it might resonate with people. So the idea, the line was, picture.
- [41:40]
Dalip Rao
Yourself dead, think of yourself as dead.
- [41:43]
Christine Ligorio Chavkin
Think of yourself as dead. Yeah, tell me about that line. And what do you want people to learn from hearing your experience and sort of thinking about that line?
- [41:52]
Dalip Rao
I'll share this. That line I shared, it's a Marcus or it's attributed to Marcus Aurelius. I feel like that line is like written on my forehead when I look in the mirror every single day. And you know, I really believe that the problems that we all face as Human beings comes from the baggage of yesterday that we carry with us. And you know, if you, if you read stoic philosophy or even Buddhist philosophy or any of the Eastern stuff, like I recently started getting into Vedanta, which my only regret is that I didn't discover this wisdom sooner in life. And you start to realize that like we're literally carrying around a dead corpse and all of the problems that we face or we think we face. I mean, think about it. The problems that you probably thought were like the most pressing and most existential of your life 10 years ago or 20 years ago or in high school, it's like easy stuff nowadays. That's life. It's not that the problems get any easier, you just get stronger. You know how to deal with those things. That quote of, think of yourself as dead. You have lived your life, now take what's left of it and live the rest of your life. And I get emotional thinking about that quote because that is applicable to everybody's life at every moment of the day. If you're going through a difficult period in life, remember that quote. Because, you know, life is so precious. And it takes for somebody like me who has gone through this like near death experience and an existential one at that, to look back and go, wow, I've really stared the end right in the face. And then there's this, this thing that pulled me away from it. And so this gratitude for not only this life, but being alive. Right. There's very few times in life where I have ever felt that alive. Right. Like when I got feeling back in my body later that day after my car accident, I was like, man, I can't move, but I feel invincible for a hot second.
- [44:14]
Christine Ligorio Chavkin
That's like superpowers. That's amazing.
- [44:17]
Dalip Rao
Yeah, yeah. It's only people who've been through that type of stuff will agree that they have also felt this way to me. I had an out of body experience, to be honest. So anyway, that stoic philosophy, that quote that I posted about Marcus Aurelius was truly one of the first things that I remember reading coming back because I started reading a lot and because, you know, after a concussion, you know, doctors tell you you can't be overstimulated, don't look at screens.
- [44:47]
Christine Ligorio Chavkin
Which is like stoic philosophies. Yeah, Perfect thing to do.
- [44:51]
Dalip Rao
I dusted off my old sort of books, philosophy books and stuff that I never, I hadn't read in a long, long time. And I started reading and I started writing a lot this summer I actually went back and Read a lot of the stuff. I lost one of the notebooks I used to have, but I have other, other smaller sort of notes and notebooks. But that main notebook, the way I jotted down, like immediately after my car accident, my wife gave that to me because that was my only outlet at the time, right? I felt alone. I felt like no one understood following the concussion. And it was. My brain was going through a healing process. So some pages are. Have like, some incredibly heartfelt and emotional and eloquent things in there. Other pages are just angry scribble with, like, nothing on it. Looking back at those stories and the things that I wrote to myself, emails I wrote to myself from back then, it goes to show that, like, the brain is a beautiful thing. You have the ability to rewire your brain in a way where you're. You can go and accomplish anything that you want. And so the company that we call Share by today and the mission behind it, yeah, it's a. It's a bit of a miracle. But so are you. So are all of us, right? We have a 1 in, I read like 1 in 400 trillion chance of becoming a fully fertilized egg and then, and then becoming human being, fully formed human being. I mean, all of us who are listening to this podcast have defied the odds.
- [46:26]
Christine Ligorio Chavkin
We're all miracles. We're all miracles.
- [46:28]
Dalip Rao
And we're sitting around thinking like, oh, we're not capable, we're not good enough. We're not this enough, we're not that enough. That's because the plaque of the world has built up on you and you're letting other people's opinions dictate what you're truly capable of. And so the person that matters the most is staring at you in the mirror every single day. And that person could also be your best friend and your worst enemy. Your number one cheerleader, but your number one hater too. But you have the opportunity to choose who you want to be for yourself before you choose who you want to be for other people every single day. And to me, the path of the recovery path, I'm still recovering. Who knows, right? I think building and being an entrepreneur is perhaps therapy of sorts of, you know, life's mistakes from the past and, you know, things that I'm not. Like, I wish I did things differently and mistakes that I wish I didn't make. But you get to take all those pieces and create the biggest thing that you've ever been capable of. And so, yeah, so philosophically Stoic philosophy, Buddhist philosophy, and now Vedanta earlier this year. I've really gotten into it has made my life that much more fulfilling. And realizing that, like, I'm not alone here I have all these dead people talking to me through their books and telling me that, like, hey, I went through this too. But, like, that was thousands of years ago. You're in good company. So.
- [48:04]
Christine Ligorio Chavkin
Yeah. So, yeah, it helps you put things in perspective. Makes you, you know, I imagine, helps you realize that the things that you think are really horrendous as you're going through it end up being small in the long run, so.
- [48:17]
Dalip Rao
Exactly.
- [48:18]
Christine Ligorio Chavkin
Thank you so much for sharing your story with us, Dalaib. It's seriously always an education. You know, we should do this more.
- [48:26]
Dalip Rao
I'd be honored. What a privilege. Thank you for having me on, Diana. Such a. Such an incredible honor.
- [48:31]
Christine Ligorio Chavkin
Well, thank you. After talking to Dalip, I'm left thinking about how his near death experience changed the way he looks at the world. I looked up the full Marcus Aurelius quote he mentions toward the end of our conversation. While you live, while it is in your power, be good. Think of yourself as dead. You have lived your life. Now take what's left and live it properly. This experience that he had didn't just change the way you looked at the world. He decided to actually do something. Something. And he did that by starting a company that both gives back and does something positive for individuals, even if it's just something small, like a lunch.
- [49:14]
Diana Ransom
That's all for this episode of from the Ground up.
- [49:16]
Christine Ligorio Chavkin
Be sure to subscribe on Apple Podcasts, Spotify, or your podcast platform of choice. Also, if you like this episode or have suggestions of what topics you'd like to hear about, leave us a review on Apple Podcasts or reach out to us on Inc's social channels on LinkedIn X or Instagram.
- [49:33]
Diana Ransom
From the Ground up is produced by Julia Hsu and Avery Miles, editing by Blake Odom, mix and sound design by Nicholas Torres. Our executive producer is Josh Christensen.
- [49:44]
Christine Ligorio Chavkin
Thanks for listening and we'll see you next week.
- [49:54]
Glenfiddich Ad
Hi, listeners. I'm Blake Odom, producer of from the Ground Up. Today we have a special segment brought to you by Inc. In collaboration with our partners at Glenfiddick. Single Malt Scotch Whiskey. This year at the INK 5000 gala, Glen Fiddick presented the inaugural Legacy Award to Stephen Marsh, founder of smarsh. This award recognizes a trailblazer, an individual who has graced the Inc. 5000 list multiple times, embodying the spirit of innovation, boldness, and a relentless drive to defy the ordinary. Much Like Glenfiddich, a brand that has pushed the boundaries of excellence throughout its 130 year history to become the world's most awarded single malt scotch whiskey, Stephen Marsh exemplifies the courage and brilliance it takes to redefine industries and elevate the game. Inc. Editor in chief Mike Hoffman spoke with Stephen Marshall about his remarkable journey, the legacy he has built, and the honor of being the first recipient of this award presented by Glenn Fiddick. Here's that captivating conversation. Enjoy and be inspired.
- [51:05]
Mike Hoffman
Hi, I'm Mike Hoffman, editor in chief of inc. And I'm delighted to be here today with Steve Marsh, the founder of Smarsh, a multi time Inc. 5000 honoree and the recipient of the inaugural Inc. 5000 Legacy Award presented by Glenn Fiddick. So, Steve, thanks so much for joining me.
- [51:20]
Steve Marsh
Thanks for having me. I'm excited to be here. Mike.
- [51:22]
Mike Hoffman
Oh yeah, this. Let me get this straight. You've been on the Inc. 5000 list 17 times so far?
- [51:28]
Steve Marsh
I think that's correct. I think 17 times.
- [51:30]
Mike Hoffman
We double checked it. You've been on the list 17 times. How many years has the company been in business?
- [51:35]
Steve Marsh
Since 2001, so about 23.
- [51:38]
Mike Hoffman
I guess you've been on the list more than you've not been on the list in the 23 years of your corporate life.
- [51:44]
Steve Marsh
I think once we finally made the revenue threshold, we made the list and have been on it since.
- [51:49]
Mike Hoffman
Congratulations. It's amazing to make the Inc. 5000. It's amazing to make the Inc. 5000 a couple of times and to to make it 17 times puts you in really rare error. Only a few companies have made it more than 15 times. Congratulations. You started the company in 2001, is that right?
- [52:04]
Steve Marsh
That's right.
- [52:05]
Mike Hoffman
Your name is Steve Marsh and the name of the company is Smarsh. Do I have it right that your original email address had something to do with the ultimate name of the company?
- [52:12]
Steve Marsh
I incorporated to do consulting work, never thinking that the business name would see the light of day. It was just incorporated as smarsh Inc. Because Marsh was taken by the large insurance company, so we couldn't use that. My friends at the time that, you know, my coworkers had all called me Smarsh because that was like my email handle. So I said, hey, let's just go with that. The domain name was available and many years later, with a larger marketing department and more resources available to us, more domain names available to us, we still decided to keep the name Smarsh. But that should serve as proof That I never had intention of building this business into anything.
- [52:47]
Mike Hoffman
So who was your first client?
- [52:48]
Steve Marsh
My first client was a small brokerage out of Boston, Massachusetts and a friend of mine had worked there and had told me about this need to archive communications for regulatory compliance. And I knew virtually nothing. I mean I knew absolutely nothing about that. I knew that I needed to make some money to pay rent and that I had some technology skills. So I set out to actually help them implement a solution that I thought I would source from another vendor and quickly found that there weren't other vendors out there doing this, at least to service the small and mid sized companies. The business at that point pivoted from being a consulting business to being the archiving and communications intelligence business that it's become today.
- [53:27]
Mike Hoffman
When you started on the hockey stick like trajectory of growth, what was the sort of first moment, if you remember, where you kind of knew, oh, this is not just a consulting business, this is a real business, a technology business. And actually it's a fast growth technology business.
- [53:41]
Steve Marsh
One moment that comes to mind is we had a large competitor in an adjacent space. They weren't archiving the way we were. They did data backup or something and they made an offer to buy the company, really in our first year of effort in trying to sell the archiving service. And it was hard as a founder to turn down. I think it was like a million dollars. But it was complicated but we passed on and that was a great decision. But that really validated for me that we had built something that was at least perceived to be of value to someone else. And of course making the Inc. 5000 list for the first time after applying earlier that year and not being able to apply the year prior to that because we didn't meet the. We weren't big enough, we didn't meet the revenue thresholds anyway, when we made that list, that was fantastic validation for all the hard work that we had done. It gave us a sense of credibility when we would go out to our customers by being able to put the Inc. 5000 recipient logo on our emails and on our website. And that actually helped us grow to the next level. Beyond that.
- [54:37]
Mike Hoffman
And you at some point took growth capital private equity, is that right?
- [54:40]
Steve Marsh
We did. It wasn't until 2007. Yeah. First investors were minority investors in 2007 and ironically the point at which they became interested was a point at which we no longer needed money. And I think many founders probably go through this when you're trying to raise money, it's a lot harder than when you don't need it when you don't need it. Everybody seems to come out of the woodwork, and then they try to convince you why you should take money. I think that was a key moment where we realized we needed to significantly upgrade our technology infrastructure if we wanted to win bigger and bigger customers. We were making incremental changes every year. You know, the. The rip and replace that you hear technology companies go through, where every, you know, six months or so, we were taking out old equipment, replacing it with new, bigger and better equipment. And that really just wasn't scalable. It was becoming a distraction to have to keep going through those projects every six months or so. By raising capital, we were able to get off that hamster wheel, and we were also able to start making some acquisitions became a part of life from that moment forward.
- [55:40]
Mike Hoffman
What did you learn about business ownership and business leadership going through the process of acquisitions?
- [55:45]
Steve Marsh
You know, we gained access to people who had operated at the level beyond where we were, which is a pattern, you know, we'll see occur over and over in our business. But there were smarter people who had more experience in a variety of areas, and they presented some of the reasons why we would want to do some acquisitions. They also educated me and the rest of my team on how to do them. But it taught me that there are a variety of ways to help grow the business. You probably don't want to grow your business just doing acquisitions, although that does create value for a lot of companies. But for us, it was a combination of organic growth through innovation and product development and serving our customers with different products and services and making some of these acquisitions to bring in new technology, to bring in additional competitors, to bring in more expertise than we otherwise would possess. And today that that trend continues. You know, we're trying to bring in more AI expertise. For example, we might look to do an acquisition there.
- [56:39]
Mike Hoffman
Can I ask, where are you guys at revenue now?
- [56:41]
Steve Marsh
We are about 500 million.
- [56:42]
Mike Hoffman
And what's the fastest growth part of the company right now?
- [56:45]
Steve Marsh
There's a lot of focus on leveraging the data that we have stored on behalf of our customers. So if you think about the initial use, case for those that don't know, is that we help customers by storing their electronic communication so that they can meet regulatory requirements. You have to have this stuff. You have to be able to produce it. That's kind of the baseline service. But what we've found is that over the years, you start to amass more and more really valuable information on behalf of our customers. So we have years and years worth of emails, text messages, zoom calls, you know, whatever it may be. In a world where artificial intelligence is taking over and people are trying to find ways to harness the value of data, we're sitting on what we think is one of the biggest goldmines out there in terms of data. It's employee communications that were captured initially for a different reason, but now can be turned into sales opportunities, customer service opportunities, new product ideas. I think we're seeing a lot of growth.
- [57:40]
Mike Hoffman
So an archive can become a large language model.
- [57:43]
Steve Marsh
Yeah.
- [57:43]
Mike Hoffman
So this is obviously the Inc. 5000 Legacy Award brought to you by Glenn Fiddich. As you think about the legacy of the company and your legacy as a founder, what do you still hope for? What is your idea of what the legacy you want to leave is?
- [57:56]
Steve Marsh
We have a very unique culture, I think one that reflects what I wanted to create many, many years ago. I want it to be an organization that hopefully my kids one day look back on and say, wow, dad must have built something pretty interesting here. It's still around, it's still relevant. Our customers still find value in what we're doing. I just want to see it reach its maximum potential. Not every company, even, you know, not every company that is started or that I'm involved in or that I invest in has the same opportunity to persist through time. Some companies are better as a short term product that maybe gets sold to someone else and they integrate the technologies. Some technologies have a shorter lifespan where maybe it's two to three years and then you have to move on. This is a business that I believe truly has the opportunity to exist for many, many years and to be relevant by just listening to customers and adapting and finding or addressing use cases that we found many years ago.
- [58:48]
Mike Hoffman
Steve Marsh, the founder of Smarsh, a half billion dollar company founded in a Brooklyn apartment that's been on the Inc. 5000 list 17 times. Thanks so much for joining us today.
- [58:58]
Steve Marsh
No, thanks for having me.
- [58:59]
Mike Hoffman
And before I let you go, we have these glasses of Glenn Fiddick here. You are the inaugural recipient of the Inc. 5000 Legacy Award, presented by Glenn Fiddick. So let's cheers to your success.
- [59:08]
Dalip Rao
Cheers.
- [59:11]
Glenfiddich Ad
Congratulations again to Stephen Marsh. And I couldn't end this episode without getting a little taste of Glenfiddich myself. And since I got a bottle right here. Cheers to you listeners with Glenfiddich, the world's most awarded single malt scotch whiskey. Drink responsibly. Glenfiddich single malt Scotch Whiskey is copyrighted 2024 and imported by William Grant & Sons, Inc. New York, NY.
- [59:43]
Brex Ad
Panoply.