← Second in Command: The Chief Behind the Chief with Cameron Herold
Second in Command: The Chief Behind the Chief with Cameron Herold
Ep. 555 - FAN FAVORITE | Rippling COO Matt MacInnis - How to Crush Politics, Bureaucracy, and Deadly Layoffs Like a Pro
00:47:07
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- [00:00]
A
Just a quick note before we dive in. This is actually one of our older episodes, but we're bringing it back because it's one of the most downloaded ones we've ever released. Clearly it struck a chord with a lot of listeners and I know there's so much value packed inside. So whether you're hearing it for the first time or revisiting it, enjoy this fan favorite.
- [00:17]
B
One thing that's important to me as a, as a leader is that I have to check in on the individual and how they're doing, which serves as the foundation to our relationship. Then I like to check in on us and how our relationship is going and then on top of that we can talk about the tasks that have to get done. You know, you can't just run into a one on one and say like, hey, how's this project going? Where's. If your one on one is not the space that offers an employee the opportunity to talk about themselves or to talk about their relationship with you or others, you're guaranteed they have no other place for it. Welcome to the Second in Command podcast produced by the COO alliance and brought to you by its founder, Cameron Herold. In the second in command podcast we talk to top COOs who share the insights, strategies and tactics that made him the Chief behind the Chief. And now here's your host, Cameron Herold.
- [01:17]
A
Matt McGinnis is the chief Operating Officer at Rippling where he oversees business operations. From 2009 to 2018 he was the co founder and CEO of Inkling, a mobile learning platform that provides the on job training for including McDonald's and Whole Foods. Inkling was named as one of the Fast Company's most innovative companies and raised over 100 million in funding before being acquired in 2018. Before Inkling, Matt spent eight years at Apple growing the use of products in education in the sciences. He holds an electrical and computer engineering degree from Harvard. So he is actually one of the smart guys because when I went to university I couldn't spell Harvard. Matt, welcome to the Second in Command podcast.
- [01:53]
B
Thanks. Look, the only thing that I learned by studying I learned two things by studying engineering at Harvard. One, it's like studying fine arts, it's not worth much. And number two, I learned that I wasn't a very good engineer which is why I went into marketing. So I appreciate bringing up the amount of money my parents spent on that to learn those two things.
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A
It's still a pretty amazing experience to be able to go there. So that's pretty cool.
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B
It was awesome.
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A
Can you Just give us a quick background on exactly what Rippling is.
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B
Yeah, Rippling is an all in one HR and IT platform. The way that I would look at it is basically any business up to 1 or 2000 employees has this massive hidden pain that they manually shuttle data from their HR system to their payroll system to Dropbox and Slack. And there's this sort of. There's this original sin of all of these systems not talking to each other. And Rippling is the one and only system that makes all of those systems talk. And we're eliminating the administrative burden of running a company, getting rid of all the busy work which our customers would love not to have to do.
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A
That's interesting. Why did you get involved in the company?
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B
There are three reasons that I joined Rippling. And the reason I can sort of jump out here and say three is that I had to think pretty deeply about it. Because when I sold my previous company and after a period of time with the acquirer, secured my freedom, it was a moment in time in my life where I was in my late 30s and had to figure out what I wanted to do. I thought I might invest full time. I thought I might start another company myself, but it was really low on the priority list that I would join someone else's company. And so I was pretty systematic in my thought process about what I wanted to do. And so I joined Rippling for three reasons. One, I know Parker very well, and it is not just rare, but effectively never that you're presented with the opportunity to, to get on a rocket ship growth company and build it with one of your best friends in the world. That just doesn't happen. And so the fact that I was offered that opportunity was pretty special in its own right. The second is that I know Parker pretty well and believe that my skills are very complimentary to his. And so it was a sort of hand in glove fit in terms of what I know myself to be good at. And then third, as I had invested in the seed round of the company and had participated in the Series A and gotten to know what was really special about Rippling, I came to understand that it had what I'll call a unique structural advantage in the market. That the way this company was approaching the problem of data in businesses or employee data in particular, was just so. It was just the right amount of different in a way that clicked for my brain. And I came to understand how this company uniquely could build a market share acquisition flywheel that no one else in this segment had ever been able to build. And Obviously, if you're going to join a company and put in 14 hours a day and blood, sweat and tears, so far, just the sweat and tears part, you know, blood is forthcoming, I'm sure. You better be damn sure that it's. That it's gonna work. And so those three reasons, right? The uniqueness of building a company with your best friend, the confidence that your skills match precisely with what the company needs, and a conviction around the business model that it was really differentiated. Those three things got me to join.
- [05:30]
A
I got a lot to jump in on here then. So on the skills, not on the skills side, but on the actual product itself and the company itself, and saying you got a chance to jump on a rocket ship, what was it specifically that you saw at that early stage that made you feel like it was. I mean, I told the founder of Uber, one year at Burning man. He was in my camp at Burning man, and I told him it was a stupid idea. It was before he even hired Travis to come into the company. So I didn't see these good ideas. What did you see that makes this one good?
- [05:56]
B
Well, I'll say that, like, I went after Parker, I have this email, and it'll be printed and framed for posterity, where I wrote him a pretty long screed about how he was fucking it up, you know, that he was doing it wrong, he was going after too many things at once. He didn't know who his buyer was. And like, you know, I think I rolled in a wheelbarrow full of investor tropes and accused him of all of them. And it was the first time of many subsequently that. Where Parker came back with, like, respectfully, I disagree with almost everything you just said. And, you know, piece by piece dismantled my argument. And my initial reaction that email was like, whatever, like, hands in the air, I'm going to go get another drink. But I kind of came back to it a few times and read it and I thought, geez, number one, Parker seems to just have a clarity of thought and a contrarian perspective on this market that I couldn't compete with. Number two, I think he might be right. And I began to wrap my head around how by breaking some of these rules. And we can talk about what those rules were if you want, but he actually was. What's the term that. I know one investor uses the term, the narrative violation. Everybody says it's this way, and then this one company comes along and does it that way, and that's the winner in the category. I believe that. And so when I got to know the business and got to understand, for example, that the system is architected from its very first line of code to be a database for other systems to access data. Whereas everyone else in the space started with a payroll system that they then glommed a bunch of database like features onto. You can't get around that adp, you know, gusto. These companies are not going to be able to go back and re architect their systems to accomplish what we were accomplishing with our system. And so I began to wrap my head around the fundamental difference of the infrastructure, the vision for the market and how that translated into product insight in a way that, you know, I hadn't really been paying attention even, even as an investor. And that's what, you know, started to catalyze excitement for me about the company.
- [08:14]
A
And are you still able to have those kinds of healthy debates that you, you know, this was before you started the company but. Or before you joined it, but are you guys still able to do that? And how do you navigate that? That's a huge lesson because I think the CEO really needs us to be the one who tells them the truth and tells them what's really when so often people don't want to say it.
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B
Yeah, well, I mean, so there's a few things I think are true about my circumstances with respect to this CEO. Yeah, I think Parker and I would probably each lay down on the railroad tracks for the other in the sense that, you know, we have a lot of life history, our families are close and we trust each other. And so I routinely say things to Parker that he disagrees with. And I would say that over the last year we've navigated to a point where I have a clearer sense of where I ought to defer to Parker's instincts. And I think he too has developed a sense of where he ought to defer to me. And he has broadly delegated large areas of decision making about the company writ large to me because he knows that I have good instincts for it. But that's all built on a foundation of pre existing trust. And I think one thing that's super clear to me, whether it's about a founder looking for a co founder, they call it founder dating. Or whether it's about a CEO who thinks he or she wants a coo. You can't manufacture trust. No. And you know, you just, it's an inconvenient truth that if you think you need someone in one of these roles, you know, co founder or coo, that if no one of that level of trust is available to you in the world, then you need. You need to. You need to face that reality as opposed to deny it and make a decision about bringing somebody in anyway. I think that's, like, true on the CEO side, and it's true on the COO side.
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A
Yeah, it's such a yin and yang relationship. When I was the second in command for 1-800-got junk, I joined the company as the 14th employee. When I left, we had 3100. But Brian was my best man at my wedding two months before I joined the company. So we were very similar to you and Parker, where we'd known each other for years, and we're really, really, really good friends already. That the trust was already so completely implicit that we didn't have to earn, was already deeply there. How do you think a company, if you're hiring an outside coo, would go about assessing whether that level of trust can be there? Or do you just work real hard on the interview process and then give the trust to the other person and let them throw it away? If they throw it away.
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B
I mean, like, I want to answer that question, but I want to zoom out for a second. I mean, the first question is whether a COO is. Is it a special case of executive or is it just another executive?
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A
I think it's a very special case. What do you think?
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B
I think it's a very special case, too, or at least it ought to be. And, like, it's a special case in a few ways. One, it's a special case because the COO tends to be second in command, hence the name of your podcast, and tends to have an outsized influence over the culture and direction of the business. But also, I think the COO gig is a special case in that the cost of failure is so much higher. And because the success rate of executive hiring in general, people say, is roughly 50%. It depends on how you define success. But I think it's directionally true that 50, 40%, 30% of executive hires just don't work out. They don't last a year. Particularly if you go through the traditional method of running a search, where a search firm has every incentive to force you to make a decision, and they give you a closed set of candidates who happen to be available in the market right now, and they hustle you to a decision and you pick somebody from that set, and then you hope it works. And it's an absolute, total travesty of a method for bringing executives into a business because the odds, right, that, like, of the seven people who happen to be looking for a CMO or VP Eng or whatever job. You know, of those people who happen to be available to you in the market today, that one of them must be a successful hire for you is fucking bullshit.
- [12:34]
A
It's crazy.
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B
Right? But you pay somebody $100,000 plus some chunk of equity to run that search for you, they are going to make sure you pick someone and move on.
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A
Yeah. What system do you guys use then to make sure that you hire the right executives?
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B
Patience. You know, it's like thoroughness, patience, intuition. I don't claim to have a higher success rate in exec hiring than anyone else, but I will say that like when it comes to. I'm actually hiring for a bunch of senior roles at the moment and I just make a commitment at the outset that I'm not going to make a hire until I find the right person.
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A
Have you guys ever followed any of the methodologies in Top Grading or who.
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B
I use Top grading. I love the definition of a player, A, potential B and C that he uses in that book and use it as a framework. I actually use Top grading more to assess the intuition of the executive. Like I use the framework of top grading even though they don't know I'm using it to talk through how they hire and fire. Right.
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A
As a.
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B
Opposed to applying it directly. But yeah.
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A
Yeah. Brad's. Brad Smart was the author of Top Grading. His son Jeff Smart wrote a book called who. He kind of took the 800 page top grading book and synthesized it down to the kind of 200 pages.
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B
He's a really good, heavy book.
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A
Yeah. Top Grading was tough, but it's good. But it's. Yeah. Who is just a much more entrepreneurial version of the same systems.
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B
Which is cool.
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A
The entrepreneurial CEOs. And are you. You were an entrepreneur. So are you more of an entrepreneurial COO as well?
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B
What do you mean by entrepreneurial?
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A
Yeah, great question. Are you? So Harvard wrote a really good article about 15 years ago called the misunderstood role of the COO and they identified seven distinct types of seconds in command. And I think that you would be more of a partner of Parker than a hired gun.
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B
Yeah, you could say I am. Without question, I am subordinate to Parker in the organization. At the end of the day, the CEO makes the decision and that's absolutely crystal clear.
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A
So he controls vision.
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B
Yep. But that said, right. Parker and I would say it's fair to describe us as co pilots. I'm his co pilot, he's the captain and I'm the co Pilot and people are. I've talked to folks about the way that he and I work together before and they've been surprised just to hear that like Parker and I may spend a total of an hour together a week, maybe two. You know, I think that even the team within the company thinks. I think that Parker and I are in sort of constant contact and you know, we're slacking and texting and that kind of thing. But there's a lot of the left hand only knows, you know, only knows so much about what the right hand is doing and vice versa because we're able to execute autonomously. And so I have an inbuilt or I have an earned sense of how to build a company and so does he. And so I don't need to rely on him for insight into how to build a company from this stage. We've both been here before.
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A
What areas of the business report up to him and what areas report up to you?
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B
Even in the year that I've been here, it's changed. So I have responsibility today formally for hr, finance, business development. Up until a week or two ago, I actually had product design. I have, I'm actually just sort of trying to scan the floor of the office that we used to have. Oh, I have all of the post sale services with the exception of implementation. So I have customer support, customer success. And I apologies to any, anybody who works for me who listens to this that I've forgotten. But those are the, I think the formal functions but I don't, it kind of doesn't. Other than, you know, with you know, the cadence of one on ones or whatever. I don't think about it that way. The reporting structure is kind of irrelevant. You know, I run the, you know, executive team staff meeting. When I look out at the management team, you know, we have our head of sales, we have our cmo, we have our general counsel, Parker, we have our VP of product and eng. And it just doesn't occur to me that there's any sort of hierarchy among those people. It's just a team and I'm on it. And when I see something that somebody needs feedback, I give it. If I disagree with a decision within a function, I express my disagreement. And I think part of this, and this is something that I think is really important for any chief operating officer. Although to be perfectly honest, I think it's true of anybody who's on a management team, is that. You can't look at the reporting structure of a management team as input to your behavior. Stated differently, Everybody always has to have the CEO hat on. And for me, the privilege or the conditioning, the privilege of conditioning that I have from having been a CEO myself for nine years is that I don't actually know how to operate any other way. I did struggle for a little while after I joined with having a boss.
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A
Yeah. And that's like, maybe that's what I even meant by the entrepreneurial COO is that it feels to me like you treat the company like it's your own. Completely, for sure.
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B
100%. Yeah. I mean, it's my own because in some very literal way it is. Right. I mean, I'm as invested, I can't. I'm actually, I think it would be overstatement for me to say I'm as invested in the company as Parker is. I think Parker, it's much close, much more closely tied to Parker's identity personally than it is for me. But I play to win. I view business as a sport. It is my sport. Some people love tennis, some people love football. I love business. It's like the big question I had to answer for myself before I took this job was if business is my sport, then what position do I want to play? Do I want to be the owner of a team, A partial owner of a team? Do I want to be in this, in the bleachers? Do I want to be the coach? Do I want to be on the field? And it was clear to me that I should be on the field, I should be a quarterback. And so I look at the management team as peers, including Parker, with the exception of when it comes to tiebreaking decisions. And I feel that it's my duty and responsibility to be as much an active commander of the direction as him, but also I expected of everyone else on the management team.
- [19:16]
A
I asked earlier about the debate between the two of you and there's a bit of an art in when and where you can do that as well. How often do you debate him in front of the board or in front of the other leadership team members? Or do you do that privately versus publicly? Or does it depend, Is it more situational?
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B
You know, this is an important question. Sometimes the very act of debate with the CEO, where another member of the team is capable of representing the other position in an effective way is in its own right, cathartic to the team.
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A
Explain.
- [19:55]
B
Yeah, you know, if you're a member of a management team and you've got a very strong minded CEO, as most companies do, so many times I have seen all members of the management team Wither in the face of a strong CEO opinion. And in fact, by being in the position I'm in right now, I recognize that I have done that to my own team as a CEO where I've come into the table with my strong opinion and everyone else has gone with me and I'm like, shit, I think I did that a fair bit where the team just went with me. Notwithstanding the fact that there was a lot of dissent in the group. It's just that the dissent wasn't particularly strongly held. And so people said fuck it and they rolled with it. And maybe sometimes that's good because it brings, you know, it eliminates indecision. But in this context, at rippling, you know, Parker will come to the table, he'll have a strong opinion. There are cases where it is particularly important for me to voice the opinion. I've heard others sheepishly share with me but not feel comfortable challenging Parker. I challenge him maybe just on their behalf in front of them so that at a minimum there's the catharsis of knowing that your perspective was effectively voiced and that it was given an opportunity to be heard, you know, and by the group or by Parker or whatever. So I do think that that's an important role I play is, is to debate Parker in front of the team, particularly the board is an easy one for me. I definitely sort of pick battles. Let me put this a different way. There's no battle picking, I would say with the board. I definitely defer to Parker, you know, in a group setting because I just don't, I don't think it's productive. I don't think there's a catharsis needed, you know, in that setting. I think if I have something I disagree with Parker on, at the end of the day, I can take that to him in private anytime I want and we can change course. The board's not going to tell us to do anything.
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A
Yeah, I almost treated the board like parents arguing in front of their kids. The CEO and COO at a board meeting should almost be completely as a force and you never argue in front of the children, but you definitely, you know, lock yourselves in the bedroom or go for a walk and have the full on debate.
- [22:12]
B
And then I don't know, I don't want to be locked in a bedroom with Parker. But I know the, the, the board setting is different. I will say though that we like, we have pretty light touch board, right. We have Kleiner Perkins. They have one seat and one observer. And then, and then Parker and our co founder Persona. So it's pretty light touch, but that dynamic is pretty straightforward. I think we try to be in lockstep going into that meeting and then if I have disagreements, I'll. I'll take them out. I also do have a good direct relationship with the board members and, and so I feel perfectly comfortable having a one on one with them and having a conversation about sort of things that Parker and I disagree on. But you know, it's never viewed as, you know, internal strife or conflict or insubordination or whatever. So.
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A
Right. And that's the key. You mentioned earlier about the flywheel and really identifying what the flywheel, that's the concept from Jim Collins in his first book or second book. Good to great. Walk us through kind of what you see as your flywheel then for.
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B
You mean the flywheel of like I talked about the flywheel of market share acquisition which. Yeah, you know, there's a few different ways that we, that we do this and some of it's kind of secret sauce. So I'll leave it at a pretty high altitude. But you know when the key to a good flywheel is when an incremental customer on the platform benefits every other customer. So the most obvious example of this is something like Facebook where the more of your friends signed up, the more it was useful to you.
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A
Yep.
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B
And you know, usually the feedback loop is not quite so like crazy strong the way that it was with something like a social network. But like that's why Facebook got to be the size of company that it is. You take Salesforce as an example. Salesforce has an incredibly strong flywheel in the form of their ecosystem. Initially when Salesforce started, they were a cloud based CRM. It was a database where you put your customer data. And they fought for years and years and years to get over the fear that it people in particular had that putting their data into a multi tenant cloud solution was putting their customer data at risk and there was a chance that somebody else was going to see it. Of course we're all over that now. But when they started, it wasn't obvious that there was a very strong flywheel there because people wanted their data segregated. And what could I possibly benefit from some other company putting their customer data into. But what happened over time was that people started to build integrations to the Salesforce cloud. And as they built integrations, more and more product capabilities came to life. You know, you could, to look at a big example marketo, you know, you could begin to link customer activity before they're ever in the line. Of sight of sales to the customer record and then a, you know, a customer could, sorry, a salesperson could see the history of engagement on the website before they talk to the customer. And it's hugely useful. Right. And so the more customers joined Salesforce, the more attractive it was for Marketo to be built and have deeper and deeper capabilities. And that, you know, that led to an entire ecosystem around Salesforce. So for Rippling, we have a pretty similar dynamic. There's never been a single system of record of employee data in all of these small and medium enterprises. In the large enterprises, you know, the 100,000 person companies that implement Workday, the problem there is, well, they're implementing workday for their H R E s and they're implementing ADP for their payroll, they're implementing Okta for their single sign on. You know, it's this giant pile of different systems that are all getting integrated by the IT department. But for small and medium businesses, they can't afford to do that. They don't have an army of IT people and then there's no off the shelf solution. So rippling comes in and we provide you with a place to put your employee data. Now why would it be beneficial for some other company to come in and put their employee data in? I don't want to see their employee data. I don't want them to see my employee data. That actually seems like a terrible idea. But the reality is that companies are beginning to build integrations to Rippling because there's such an awesome set of APIs and interfaces for them to be able to access that data to do cool things. Take Brex for example. Brex, you use your Brex card, you have a spending limit on your Brex card. Well, if you today in Rippling are promoted from manager to director, or if you're moved from, let's say marketing into sales, the Brex spending limit will automatically update for you when you move over. Now the IT people didn't have to do that, the finance people didn't have to do that. Somebody didn't forget to do it. It just happens automatically. And this is something that Brex could never do on their own in their own product. And so that's just one little example of the more people bring their employee data to Rippling, the more developers are going to have an incentive to build integrations to our platform. And that flywheel is once it gets going, it's unassailable. And I would argue that we've already got it going.
- [27:10]
A
That's interesting. Yeah. And once you're really clear on what that flywheel is and stay focused on it. That's where scale and the growth really happens. How do you avoid the kind of corporate hairball? How many employees do you have right now at Ripley?
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B
About 240.
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A
Yes, you're there. You're at the stage now where you've got hairball stage.
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B
Yeah.
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A
Like the politics are coming in and the systems that you're not even sure why. And then you got people walking around, you're like, fuck, I don't even know who you are, let alone what business area you were in. How do you avoid the corporate, the bureaucracy, the waste? Do you have systems to look at that or to watch for that, or do you just try to run fast?
- [27:45]
B
So there's corporate bureaucracy and there are politics, and these are two really different things. Let's talk about each of them. So bureaucracy. Bureaucracy is, I would say, if I were to define the term, it's process that slows us down. And the worst kind of bureaucracy is the overwrought process or the unnecessary process. Those things are first cousins. Overwrought process is one that just, Jesus, why do I have to do this much stuff to get this task done? And then there's also poorly designed. There's a lot of ways that processes can go wrong. And so I would say that the way that we tackle that at rippling as we've grown is that we have not implemented process at all until something is very clearly broken. In other words, you have to feel the pain of the lack of process before you implement the process. There's a whole bunch of things around, like, good process design, I will say, like principles of good process design. Good processes are built bottom up. 90% of people who hear the word process, their first instinct is to, like, go open up a blank word Doc or Google Doc and begin to write down a process. Okay, well, first we'll do this and then we'll do that, and then we'll do this. And if this happens, then go do. It's like, that's absolutely the worst fucking way to build a process. The way you build a process is like you go to the people who've been doing this every day and you say, how do you do this? Can you just like write down the steps you typically take? Like, what's the fastest way you typically get this done? Like, oh, I just go, bing, bing, bing, bing, bing. And then boom. That's a process. The problem is that half the time people don't even have that much happening in their business before they decide that something needs a process and they start to develop something before it's even been done, bottom up. And that just yields these, these terrible sort of hypothetical processes that have no bearing on getting something done efficiently in the real world. So that's a whole area that I'm super interested in.
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A
How about on hiring? I've been batting around an idea with a couple CEOs that I coach recently, and I gave one the analogy that were going to go spend a quarter million dollars on some marketing campaign. We would spend hours debating it and looking at it and slicing the data and looking at the different scenarios. But if some, you know, if a VP came up to you and said, I need to hire three more people and they're $80,000 each, we'd probably spend two minutes on the decision. Do you have any. Which I think is terrible. Do you have any process or decision for hiring and for allowing people to hire? How do you allow those people to get hired into the organization? So you don't have, you know, people building their little fiefdoms or adding people just throwing bodies at it instead of.
- [30:24]
B
Oh, man. So is the question how we make the decision to, you know, open a headcount or is.
- [30:30]
A
Yeah, we.
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B
I mean, we approach. We are, I would say we're parsimonious. And you have to.
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A
Sorry, that's a Harvard word. I went to a smaller school.
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B
We're cheap. We're cheap.
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A
Okay.
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B
We're frugal. We know. We don't. We are. I mean, it's back to the same thing as a comment I made earlier about process. Don't hire more people until the pain is intolerable.
- [30:57]
A
So you really wait until the pain is intolerable to allow it to be.
- [31:00]
B
Yeah, man. Because like this principle holds across the board. Don't develop process until you really need it. Don't hire people until you really need them. Don't strategize three quarters out in a high growth company. Because the amount of energy, the amount of energy that you spend trying to get something right in advance and you sort of take the subset of that energy that ends up generating a decision that is correct. Okay, so let's just say, like, let's say that there's a unit of energy, a unit of measure for energy. There isn't. But let's just say it's time. But like, you know, let's call it a thousand units of energy spent trying to figure out the future and make a decision. Okay? And 50% of those decisions were correct. And 50% were incorrect and needed to be redone. All right, so let's say 500 of those units now were well spent. 500 were wasted. And let's say instead of spending those thousand units up front thinking and thinking and spinning and spinning and meeting and meeting and talking and talking and building and building decks and trying to get to a decision, you just said, fuck it. I'm going to go, going to wait for this to get super difficult, but in the process, I'm going to gather a ton of like, recon, like really practical data about what the hell is happening in this situation. Then I'm going to make a decision immediately in the moment about what I should do. I maybe spend 100 units of energy on that and I get a right answer 98% of the time.
- [32:30]
A
Way smarter, way better.
- [32:32]
B
But it's really uncomfortable because our tendency is to want to say, all right, let's sit down and think this because we attribute way more.
- [32:40]
A
So is that a cultural norm that you set within the organization?
- [32:43]
B
And it comes from Parker? And, you know, I am, I think, sort of predisposed to sort of agree with the. Parker takes it to an extreme where, like, he's 99th percentile. I'm like 90th in terms of proclivity to be sort of impulsive and reactive to the situation. I dial that back a little bit. We implemented a quarterly planning process, but only quarterly. We, you know, we implemented, we're implementing, you know, job levels and bans and the sorts of infrastructure that will allow us to do a little bit more in the way of sort of financial planning. But, you know, we resist the tent. I mean, this is. We resist the temptation to engage in deliberation for the sake of debate. And, you know, you were asking me about process and we also talked about culture. Sorry, not culture, but although they're related politics. The other thing to remember about politics is like in a business, if you give people a ton of free space to worry about their, you know, how I'm doing, am I, you know, am I going to be important? Am I, you know, what's that other guy doing? Is he going to be more important than me? Where, you know, there's room to put yourself above the team or the team above the company, you inevitably get politics. But the antidote to that is if you don't over hire and in fact, if you just barely underhire and everyone is just go, go, go all the time on what needs to get done, you don't have much in the way of politics because people don't have Time for that shit. They're too busy trying to deliver the result. And I know that that sounds almost glib in its simplicity, but if you've ever been in a high growth company, you know that politics tend to fall by the wayside because it's really just about results. And if you've never been in a high growth company, you're not allowed to argue with me.
- [34:39]
A
Interesting. You're right, politics do tend to creep in when growth slows down at times.
- [34:42]
B
That's right, when growth slows down, there's more room to worry about yourself.
- [34:49]
A
Good question. This is a back question about the exit that you had. Any lessons on or from that exit that you could bring forward today or that you could share with us?
- [34:58]
B
I mean,
- [35:00]
A
that's a really open ended question.
- [35:01]
B
I learned a lot of lessons like all along the journey. I would say that the single largest kind of existential learning from the entire journey, from starting a company and getting funded by Sequoia and feeling like we were a predestined success, to pivoting multiple times, doing multiple rounds of layoffs, disappointing many, many people, ultimately building a business to profitability with tens of millions in revenue, but having an exit where you kind of, you know, returned, you know, a fraction of every dollar invested in the business. And then as a founder and CEO, having gone through that whole experience coming out the other end, yeah, I got a check and I'm very, very grateful for that, but didn't get rich. You know, it wasn't sort of the giant multi billion dollar outcome that you assume is your only option when you're a 20 something starting a company in Silicon Valley. It tore my ego apart. You know, it completely stripped me of the sort of armor that I had built up around myself as, you know, a predestined success. And if anything, you go through high school, you get good grades, you graduate valedictorian, you go to Harvard, you study engineering, you realize you're not a good engineer.
- [36:34]
A
Yeah, you didn't have those failures.
- [36:37]
B
You didn't have the failures. I had other failures. I'm a gay man and I had to go through the sort of challenge of being a gay kid in high school. In the 90s I was in Canada, which is a better place to be than Alabama for sure. But you know, I had my challenges, but I was always able, always as an individual contributor in my own life, I was able to achieve an outcome that, that would, that would reinforce the notion that I am the master of my own destiny. And what I had to learn the very Very hardest way is that, number one, no amount of energy on my part can. Can guarantee an outcome. And number two, life is a team sport. And I had these. In the academic world, we're trained or conditioned to believe that your grade that you get of your own effort at the end of the semester is under your control and that that conditions you with that sort of pattern in life that, like, your effort is correlated with your result. But it's bullshit. There's just way too many externalities and too much dependence on other people. Right. So for me, when I got to the end of that experience, I had been beaten to a pulp. And I am so much better for it. I'm so much better a human being. I'm so much more at ease with who I am. I'm so much more at ease with the pursuit of the sport of business today than I was for the vast majority of the time that I was a CEO of my own company.
- [38:09]
A
It's really cool. That's really cool. Where in Canada did you grow up?
- [38:14]
B
I grew up in Nova Scotia.
- [38:16]
A
Nice. My dad went to school in Antigonish, Saint of X.
- [38:19]
B
My mother also went to St. Actually,
- [38:22]
A
it's weird, but I was the big disappointment because my dad went, my grandfather went, and then my great grandfather went to St. Of X when it was still in New York State.
- [38:29]
B
Nice. Wow. Yeah, well, my. Yeah, my brother and sister both went there, My mom went there, and I was the great disappointment too, because I
- [38:35]
A
went to Harvard, I went to Carleton.
- [38:37]
B
There you go.
- [38:38]
A
They accepted me. The great disappointment. That's funny stuff. Yeah. I grew up in Sudbury, up in Northern Ontario. Last two quick questions before we wrap. How do you do the layoffs? Right. The big rounds of layoffs. Right. They're tough.
- [38:55]
B
Yeah. For a period there actually maybe still am a go to guy on layoffs. I know Sequoia tends to have the person to whom they send their founders when layoffs are necessary. And I've been on the receiving end of that email a few times. Layoffs are. There's a few rules. Actually, I have a rule about rules. Ready?
- [39:20]
A
Yeah.
- [39:21]
B
If I should say it's a rule about advice, I should say it's advice about advice. Okay. I'm getting super meta. My advice about advice is that if you hear someone you trust give you a piece of advice and you get it roughly the same advice from two other people. Just take it.
- [39:40]
A
Just take it?
- [39:41]
B
Yeah, take it. I mean, just 100% of the time, just take the advice. And on layoffs, if you go and talk to People who have conducted them successfully in the past. You're guaranteed to get the same advice over and over again. Number one, the minute you make a decision to do layoffs, execute them aggressively. And what I mean is, go quickly because people are going to know you're going to do them. And make sure you cut more than you think you need to cut. Otherwise you're going to regret it because you're going to be back to the trough for a second round later, which is 10 times as demoralizing as the first two. Is that you know, when you do layoffs, man, you have to execute with absolute precision. You. There is no margin for error. You can't fuck up the paperwork, you can't fuck up the messaging. You can't outsource the problem. I heard recently about a CEO who hired a PR firm to advise him on the employee messaging. And it was just terrible. You know, like basically the PR firm was advising him in such a way as to minimize what it would look like to the media. The media is not your audience in a layoff. Your employees, and in particular the employees who are remaining. Right.
- [40:49]
A
The ones that are going to have the survivor guilt.
- [40:51]
B
Yeah, there's just like tons of good resources out there on layoffs, but it's like a hook line. This is one of those cases. Layoffs are one of those cases where there is a right answer and deviation from the right answer is less, it's just worse. And you know, there's relatively few times in business where that's true, where there's a right answer to something. And so if it's available to you. Don't be an idiot.
- [41:14]
A
Are you part of the C100 at all?
- [41:16]
B
I'm familiar with C100. I've done events with them. I don't spend a lot of time on it, but I loosely affiliated. How's that?
- [41:22]
A
Just great group. Like the whole. You know, there's more VCs from Canada living in the Bay Area than there are VCs in Canada.
- [41:29]
B
Well, I mean, Canadians kind of run Silicon Valley as. As far as I can tell, every time you turn around, there's another Canadian in a.
- [41:36]
A
It's funny you mentioned Kleiner. I was a reference for Elon in his very first round of funding in January of 95, when he and Kimball just had one employee and I had to call Kleiner and I didn't know what the Internet was. And it was a really crazy phone call.
- [41:47]
B
I hope you got shares in the company.
- [41:49]
A
I did not. It was zip for zip, too. I wish I had. They did a huge exit. Last question. On one on one meetings. I've got an idea that you probably have a, a great way that you run your one on ones for your team. How do you run your one on one meetings?
- [42:04]
B
Oh, man. I have, I have, I have a user manual, first of all, which is a document that's based on an essay from Elad Gill and he captured it in his book the High Growth Handbook. I highly recommend, highly recommend that all executives, but in particular coos in any sort of growth company do take the time to articulate your user manual. Because every time a new employee joins, every time a new executive join, anybody's gonna have to work with you. You can hand in the user manual and say, hey, here's a cheat sheet on how to work effectively with me. And oh cool, a user manual for you. For me? Yeah. It's the user manual for Matt McGinnis. And it's like, it's just like here, here are my strengths, here are my foibles, here are the things that bug me, here are the things that I appreciate. One of the things that I put in there is my one on one sort of how I like to run one on ones. And then I sort of stick with it and I sort of don't, I have to be perfectly honest, like what I like to do with one on ones. I like to have a document where I keep a backlog, like a running backlog of what I want to discuss with somebody. And so people with whom I have one on ones regularly is usually like a bunch of items that have come up over the course of the week that aren't urgent, but we should talk about that. I just sort of toss in there and it serves as the agenda when we do get together. And then we keep notes in those documents. And I'll say that like, I'm not militaristic about its use. And so certain employees, most of my employees use it some. It just doesn't work for us and we do a different way. So I would say I'm pretty flexible with it. You know, I will say one thing that's important to me as a leader is that I have to check in on the individual and how they're doing, which serves as the foundation to our relationship. Then I like to check in on us and how our relationship is going. And then on top of that we can talk about the tasks that have to get done. Because you can't, you know, you can't just run into a one on one and say, like, hey, how's this project going? Where's. If your one on one is not the space that offers an employee the opportunity to talk about themselves or to talk about their relationship with you or others, you're guaranteed they have no other place for it.
- [44:14]
A
Amazing. Would you share your manual, your Matt McGinnis manual?
- [44:18]
B
Of course. I'd be happy to.
- [44:20]
A
I would love to read it. Would you have permission to share with our listener as well?
- [44:23]
B
Yeah, I think so. I'll have to read it one more time, make sure there's nothing too revealing.
- [44:27]
A
It could be one of your legacy moves. It's a really powerful idea that I haven't heard in and I've heard a lot of stuff in business, but this is a really cool.
- [44:35]
B
Yeah, no, I'm happy to share it.
- [44:36]
A
All right. If we were to go back to the 20ish year old, 23 or whatever year old self graduating from Harvard and you wanted to give yourself some advice, what would you tell yourself back then?
- [44:45]
B
Oh man, there's a lot. But I'll say the highest order bit for me at least, and I think it's true of every human, I would try to convince myself that the authentic version of me is the best available version and that I should accept whatever comes from that with grace. I shouldn't try to be someone else. I shouldn't look to outside benchmarks to frame up what I need to become. I should look within, you know, look within for the answer. And I think if, if I'm good at this and not good at that, I suspend all my time on this and let that go. Even if I think I'm supposed to be good at that.
- [45:29]
A
I like you saying it's the best available version of you.
- [45:31]
B
Yeah, it is. Because there's, there's, you know, anything, anything other than your authentic self is a less good version. And so stick, stick with what's authentic.
- [45:40]
A
Matt McGinnis, chief operating officer from Rippling, thanks so much for sharing with us on the Second in Command podcast. It's amazing.
- [45:46]
B
My pleasure, Cameron. Thanks for having me. You've been listening to Second in Command, brought to you by COO alliance founder Cameron Herold. If you enjoyed this episode, please be sure to like share and subscribe to us on Apple Podcasts, Spotify and our other podcast streaming platforms. For more best practices from insight industry leading COOs, visit cooalliance.com.
- [46:32]
A
Hey, it's Cameron Herold, your COO whisperer and guide to scaling businesses. Check out my YouTube channel at YouTube.com amronherald and that's H E R O L D where I share tons of raw tips and insider secrets to have you level up as a leader and grow your company from leadership hacks to growth strategies. It's all there. No fluff. Subscribe now. Hit that bell for notifications and comment on a few of the hundred videos that I've uploaded so far and let's build your empire together. Let's go.