What does it take to build a hiring powerhouse? In this episode of Not Another CEO Podcast, David Politis sits down with Daniel Chait, Co-Founder and CEO of Greenhouse, to discuss his journey from software engineer to leading one of the most influential hiring platforms.
Daniel shares insights on structured hiring, the importance of early-stage learning, navigating investor challenges, and how leadership evolves as a company scales.
Takeaways:
Defining a Clear Mission from the Start: Many hiring platforms focused on reducing administrative burden, but Greenhouse took a different approach. Daniel explains how taking the time to clarify their mission—helping companies become great at hiring—set them apart and shaped their long-term success.
Creative Validation Before Building: Before launching Greenhouse, Daniel and his co-founder tested their hiring methodology through in-person workshops, using index cards to help companies structure their hiring processes. This early validation gave them confidence in their approach.
Navigating the Venture Capital Journey: Fundraising wasn’t easy—Daniel and his co-founder struggled to secure their initial capital. He shares how they ultimately raised money, the challenges of pitching to 60+ investors, and why persistence is key in venture-backed startups.
The Art of Hiring & Performance Management: Daniel reveals why great hiring is one of the most powerful management tools. He discusses how strong recruiting processes make it easier for leaders to build high-performing teams and remove underperformers without fear.
The Evolution of CEO Responsibilities: As Greenhouse grew from a small startup to a global business with over $200 million in revenue, Daniel’s role shifted. He shares how he balances strategy, communication, and hands-on involvement to drive success at scale.
Lessons from Tough Times: The COVID-19 pandemic forced Greenhouse to rapidly adapt as hiring slowed across industries. Daniel reflects on how they navigated uncertainty, supported customers, and came out stronger on the other side.
Quote of the Show:
“ I'm like a bazooka… it's not the right tool for every job… but there’s some problems that only a bazooka can solve.” - Daniel Chait
Links:
LinkedIn: https://www.linkedin.com/in/dhchait/
Company Website: https://www.greenhouse.com/
Ways to Tune In:
Spotify:
Apple Podcasts:
Amazon Music: https://music.amazon.com/podcasts/7c6328f0-9b42-41db-8fe2-d263b4fbb261
Transistor: https://podcast.notanotherceo.com/
#NotAnotherCEO #BusinessSuccess #Greenhouse
Chapters:
0:00 Intro
1:28 What You’d Do Again As CEO
3:10 Validating the Business Idea
5:37 The Role of Structured Hiring
12:41 Hiring Strategies and Challenges
22:54 Scaling and Leadership Evolution
25:35 Effective Communication as a CEO
30:25 Adapting Company Meetings
33:56 Raising Early Stage Investments
37:42 Strategizing for Series A and Beyond
43:17 Building a Tech Business in Early New York
49:54 Biggest Challenges Faced
52:52 Remote Work and Future Vision
58:44 Daniel’s Background
1:06:40 Advice to Younger Self
1:08:49 Outro
Transcript:
[00:00:00] Daniel: You're not looking for revenue, you're not looking for growth, you're damn sure not looking for profit. What you're looking for is learning, and how quickly can you learn is the metric you're optimizing around.
[00:00:36] David: Today's guest is a multi-time founder who has dedicated the last 13 years of his career to revolutionizing the way companies discover and hire top talent. He's one of the few entrepreneurs who was building technology companies in New York City 20 plus years ago. Those were definitely the early days, and his current business is one of the most successful SaaS companies to come outta [00:01:00] New York.
[00:01:01] They've helped thousands of companies improve all aspects of hiring, helping them attract top talent, and elevating recruiting to be a strategic business driver. If you've been involved on either side of a hiring process, there is a very high likelihood you've interacted with their software. Please welcome Daniel ch, co-founder and CEO of greenhouse.
[00:01:22] Daniel: Hey David. Good to see you. Nice to be here.
[00:01:24] David: great to see you. Thank you for doing this.
[00:01:26] First, first
[00:01:27] Daniel: Sure.
[00:01:27] David: right in. What is the one thing you've done at Greenhouse, big or small that's had the biggest impact? And you'll absolutely do. Again, if you're CEO of another company in the future.
[00:01:38] Daniel: Great question. Uh, right off the top, I think, you know, um, I go all the way back to the beginning. Uh, and, and I would say that more than anything else, the way that we approached coming up with our company's mission more than anything has had impact, lasting impact on, on the business. And I say that because, you know, at the time it wasn't, it wasn't really [00:02:00] obvious what a company like ours ought to be doing.
[00:02:02] In fact, most companies that were in the kind of hiring and recruiting software saw recruiting and hiring as administrative in nature as something that involved kind of paperwork tracking and compliance. And that was reflected in a lot of the tools at the time when we started. Everybody that was selling recruiting stuff said stuff like, your hiring software is complicated.
[00:02:23] Hiring's a pain in the butt, nobody wants to do it. We're gonna make it really simple. We're gonna get all the hassle off your plate so you can focus on what matters. And we basically saw that as the wrong approach. We said, no, no, no. There's a major significant strategic imperative that companies have now, which is to be great at hiring and nobody's helping them do that.
[00:02:42] And so we took a lot of time, probably more time than most. I think a lot of startups say they, Hey, let's get into it. Let's start building. Um, but we really stepped back. I credit my co-founder with a lot of this, by the way, came, came with a great product background and said like, let's really clarify who we're selling to, what their problems are, how we're gonna do it, how we're [00:03:00] gonna do it differently.
[00:03:01] Um, and I think the time that we invested upfront to clarify the mission and our approach, um, as I say, has been paying off dividends for now, uh, as you say, 13 years plus.
[00:03:10] David: And so when you think about that, was that in a written form? Was that over a course of, you know, a hundred hours, two weeks? Like, how, how, how did, how did you
[00:03:21] Daniel: Uh, well, to, to, to paraphrase. A, a famous saying is gradually and then all at once. So we, we struggled for the better part of a year to figure out what we wanted to do and churn through dozens and dozens of different business ideas and, and really didn't hit on anything we believed in. And then kind of all at once, you know, we had this aha moment where, you know, we kinda looked at each other.
[00:03:41] We thought, well, what do, what do we really know? And we talked to each about our journeys in hiring and, and the things we had learned and, and the, the things we had seen that work really well and the struggles we had seen at so many other organizations weren't doing those things. And it kind of all came, it all came, it all came kind of barreling out at once.
[00:03:58] Like, ah, there's this huge opportunity. [00:04:00] The way to do it is really clear. Nobody's doing it really well. We think we can deliver this thing. And we spent like a couple of weeks just like, almost like getting it out of our heads. Like the idea was already, the idea kind of emerged fully formed. All we had to do was write it down.
[00:04:14] And we wrote this kind of business plan sort of manifesto of what we wanted to do and, and kind of a PowerPoint, the deck of how we are gonna do it. Um, including things like changes that we thought we wanted to see happen in the industry or that we thought would happen in the industry if we were right.
[00:04:31] Um, and I gotta say like we really were on that roadmap for, you know, over 10 years, you know, where John and I would go back to this, this kind of document that we had written in, in 2011 in November before we even incorporated. And it was like, ah, right. So here's how this is playing out and here's what's gonna happen next, and here's what we're trying to do.
[00:04:50] Um, so it was one of those moments of kind of where creativity comes, like you've been steeped in it so long, and then it all clicks kind of all at at one time.
[00:04:58] David: And where, [00:05:00] um, where did customers, like how much time did you spend
[00:05:03] Daniel: Yeah,
[00:05:03] David: this
[00:05:04] Daniel: a lot, a lot. so, you know, as soon as it came into our heads and, and, and got written down, you know, then we began the process of, well, let's validate it. And as I say, you know, a lot of, I think startups, they just start blasting out code. 'cause code is cheap to write these days. In fact, now it's cheaper than it was even then.
[00:05:21] And then it was cheaper than when I started my first company. So, you know, it was easy thing to do because no one's gonna stop you. You can just start writing code. But we didn't do that. We said, well, what are the kind of unknowns? What are the things that we need to prove to ourselves, you know, before we can scale this business.
[00:05:37] I always think that if you're gonna be a venture backed SaaS business, fundamentally the job, I like to say it as, um. Is, is you wanna create a capital constrained growth engine. What I mean is you wanna get to the point where the only thing you need is money and then you can produce lots of growth. Well, we weren't there yet.
[00:05:55] We were, we were two guys with an idea. And so it's like, what do we need to know? Well, we need to know things [00:06:00] like, are we right about the, the theory of like what companies actually care about and, and how we think they can get better through this methodology? Um, uh, do we know like who buys this thing and what they're willing to pay for it and what their alternatives are.
[00:06:13] Um, and on and on. And we just kinda like lined up, what are those questions? Each one of which we figured out how we would answer and get us closer and closer to that idea of a capital constrained growth engine. 'cause once you have that, selling that to an investor is really easy. We could raise money on.
[00:06:27] And, um, and so, I mean, the first thing we did, we literally, on index cards, went to a friend of mine who, uh, worked at a, at a big company and she was building out a, at that time, a team of iOS engineers and said, Hey, um. Can I, can I run an idea by you? Sure, absolutely. So we went to her office, literally the stack of index cards on a pen.
[00:06:47] And said, okay, we're gonna talk to you about a hire that you're making right now and ask you some questions and, and you can answer them. She said, okay. And we started the timer and we said, so like, tell me about the, the type of hire you're making. She said, okay, I'm like hiring an iOS engineer. What are the skills you [00:07:00] need for that job?
[00:07:00] And she started listing them off. And everyone, we would write a next card, put on the desk, she named six or seven. And then we said, okay. So for each of those skills, like how, how will you know if, if, if the person has it, like what are you gonna do to test for that skill? Well, I need someone that can program an objective.
[00:07:15] CI need someone that can manage projects and deadlines and that's gonna be creative, and so on and so forth. And each of them, she spent a minute and thought about an interview and okay, this is how I'm gonna test for it. And we said, okay, who in your team is gonna deliver each of those assessments and blah, blah, blah.
[00:07:28] And then lastly, kind of where are you gonna find people like that? What are some places where people like that are gonna be, that you're gonna go get them? And each of those, again, we would write a index card and at the end of it we stopped and, and, and we stopped the timer. We said, so what do you think?
[00:07:39] And she looked at the desk at the rows and columns of index cards and she looked up and she said, can I keep this? I said, what do you mean? Said that is the most impactful, effective hiring plan I've ever seen in my life. I wanna use it. Or like, oh, we're onto something. And we looked at the stop option. It was like 10 minutes.
[00:07:55] So in 10 minutes time with zero technology, someone just through the [00:08:00] right set of prompts and thinking could get to a place where they saw a revolution in how they themselves were able to approach hiring this. Someone had a big successful company. We were in a high skyscraper in midtown Manhattan. And so we thought, okay, we maybe we're onto to something.
[00:08:12] The next thing we did was, um, we went to a general assembly, which, uh, at the time was, um, kind of a startup
[00:08:21] David: Yeah.
[00:08:22] Daniel: university, I don't know what you call it, startup school.
[00:08:24] David: Hmm.
[00:08:25] Daniel: Yeah. And they would take people in who wanted to build startups and they would say, okay, everything you need to know, we can teach you like a bootcamp, whether it's like JavaScript programming, web design, search engine optimization, like all the stuff you need to know to build a build and, and grow a startup.
[00:08:39] And we said, Hey, like I think hiring is really important in, in, in growing a business. And you don't have a class in that. Can we teach this class? And they said, absolutely. And so they took care of like marketing the class, bringing students, they had the physical room, the classroom, and all we had to do was show up and, and deliver the class.
[00:08:56] And so day one we got there and it was like a Tuesday after work and they filled [00:09:00] up the room, there's like 30 people. And I sat at the front of the room and my co-founder sat at the back with a clipboard taking notes. And I basically talked about what we thought of at the time. It was like kind of the greenhouse methodology of structured hiring.
[00:09:10] Here's how you do it, here's what a, here's what a scorecard is, here's what an interview plan is. And we didn't, you know, again, this was just the same thing as the Nicks cards in lecture form. And again, like. If we left that and it didn't land, then we had to go back to the drawing board. Like if people didn't get it, like how do we talk about these things?
[00:09:28] We worked out a lot of the terminology, I mean the word like scorecard or interview kit, like those are things we had to workshop through these things, like do people actually get it? But David stuff started happening. People would email me the next day and they would say, yo, I took your class at GA last night.
[00:09:41] I had a meeting. I called a meeting on my team the next morning and threw out our playbook on hiring and rewrote it according to your class. Like this is incredible. And time, and again, people would do that. And so a lot of our early customers actually came out of that class because they connected with what we were saying.
[00:09:57] And so when we had a product that could do it, I could go back to them and [00:10:00] say, Hey, that methodology we talked about, now we have some software to automate it. But it helped answer again, some of these fundamental questions of like, are we saying that something's gonna land? Are companies actually gonna be able to do this stuff?
[00:10:09] Are we right about the theory? And on and on. And so we did things to figure out like the business model and all the rest of.
[00:10:15] David: it. I love it. That General assembly one is a, that's a good, that's a good story. I love it. Because I think when I've talked to people, 'cause this wasn't the first
[00:10:25] Daniel: And that was my third
[00:10:26] David: right? This was the second, this company, third company. And so when I talk to multi-time founders, the amount of time that they spend doing this, this is all the time.
[00:10:38] I mean, basically when I talk to multi-time founders, they're, they're like, I spent, I met with
[00:10:42] Daniel: total
[00:10:43] David: Potential customers. I, the
[00:10:46] Daniel: hundreds, you know?
[00:10:47] David: I
[00:10:47] Daniel: Yeah.
[00:10:48] David: did this thing at a, you know, I, I love, I, I love that and I think I, I am of the opinion, you know, it is this thing where you feel like you just want to go and you want to build and you want to everything.
[00:10:59] And it's like, [00:11:00] that's the natural tendency. But actually taking all of that time you go
[00:11:06] Daniel: You got it.
[00:11:07] David: once you go
[00:11:08] Daniel: I mean, number one, you know, you have, you you have so much of a richer data set of kind of stories to pull from. When you're talking to that prospect or that investor and they're asking you questions, you'd be like, ah, you know what? I was talking to the head of recruiting last week at so-and-so, and here's what they're going through.
[00:11:22] Like, it's so much more credible and it's, it's, it's so cheap to, to, to make mistakes. Like making mistakes at software is, is expensive even now, you know, to to, to address that in, in the market, it takes time and it's costly and, and to do it in, in pen and paper and is so, is so inexpensive that you can learn so quickly.
[00:11:42] And, you know, we thought a lot about the Lean startup methodology, which was, which was, had, had recently come out at the time. And I thought the key insight from that, that we tried to apply was this idea that you really need to think about your business in, in kind of two distinct phases. The first phase where you really don't have product [00:12:00] market fit.
[00:12:00] And after. And in, in that first phase, all the things you think about in the, in the later phases don't apply as metrics of success. You're not looking for revenue, you're not looking for growth. You're damn sure not looking for profit. What you're looking for is learning and how quickly can you learn is the metric you're, optimizing around.
[00:12:19] And so that's all we were thinking about was like, what are the questions we're, we're, we're, we're having or the, you know, you could say the risks in the business, the unknowns, and then how quickly can we barrel through them and get to get to knowns. Once we had that, then again, like I say, then you're like, okay, now it's just a matter of execution and growth and we need capital and we need people.
[00:12:35] But you're following a playbook that you've got a ton of belief in and, and evidence behind.
[00:12:40] David: one. One of the things, obviously you're an expert in hiring at this point. Um, what is it that you look for when you're hiring someone for your team?
[00:12:50] Daniel: Well, I'm, I'm kind of zen about the whole idea of an expert in hiring. I, I feel like, uh. If you feel like you're an expert in hiring, you probably don't know enough yet. [00:13:00] I feel like, you know, if you, the more you learn, the more you realize, like, it is really hard and there's a lot of subtlety and a lot of nuance to it.
[00:13:06] And so I, I always start there as like, this is not an exact science. Um, having said that, you know, I think the goal of a great hiring, a goal of a great hiring process is to improve the odds is to make it more likely that you'll hire the best person you know, every time, and that you can learn and adapt and, and continuous improvement is the name of the game.
[00:13:26] Um, you know, for me, I think maybe relevant to your question, a little bit about context around the business itself, because the answer to your question changes with what's happening in the business.
[00:13:36] David: Hmm.
[00:13:37] Daniel: So I would say when we started, we were looking for, one of the kind of key things that we looked for in, in, in leaders was the, you know, smarten gets things done.
[00:13:46] Like, and you can figure things out like problem solving, entrepreneurialism. Because everything we were doing was new and growth and whatever problems we were solving today, by the time I hire and onboard you, I got new problems. Um, [00:14:00] and, and so it was more about like that adaptability. And I think that served us really well for a long, long time.
[00:14:06] Now, I'm sitting here, you know, early 2025, you know, over $200 million in revenue. Thousands, thousands of customers, you know, many hundreds of employees across the world is different. And what's interesting about Greenhouse now is we both have a big existing business as I just kind of categorized for you, and there's a huge amount of growth and, and new things that we're, we're trying to push on at the same time.
[00:14:31] So the thing I'm looking for a leader now is that that like kind of high dynamic range, that idea that you can operate at the strategic level. You can think big picture, you can think long term.
[00:14:39] David: Hmm.
[00:14:40] Daniel: Um, you can communicate at scale and. We don't have corner offices here. You know, you gotta like, get your hands on the business and like, make a spreadsheet and send an email and talk to a customer.
[00:14:51] You know, you can't be too good for, for those jobs 'cause you still gotta get stuff done. You still gotta be interested in building and growing, um, and learning. And so it's a [00:15:00] different mixture. It's a different profile. And certainly if we talk again in another 10 years, it'll be, it'll be different again.
[00:15:06] David: Do you have, do you have a question, a go-to question that you ask in the interview process?
[00:15:11] Daniel: I mean, again, I kind of reject the, I kind of reject the notion of that. Like, it's not, there's no, there's no magical question. It's like, oh, everyone's gonna write this down. Oh, I'm gonna ask all that. Everyone should ask this one question. You know, that's like, great for like a Buzzfeed listicle, but it doesn't really work.
[00:15:24] Um, you know, you, there's no, unfortunately, there's no shortcut. Like you gotta think really carefully about what you need. Um, and then, and then you gotta, you gotta focus your, your limited time with interviewing someone on those important, on those important needs. And so it really depends on what you need in that role and what you're looking for.
[00:15:40] David: And so how do you, how do you determine, you know, like how much time do you spend right now with a candidate? How
[00:15:48] Daniel: Yeah.
[00:15:48] David: are you spending with them in an interview process?
[00:15:50] Daniel: Um, I will spend ultimately probably eight hours with a, with an exec that we hire. So I'll do a one hour screen off the bat, um, [00:16:00] you know, near the top of the funnel. Um, then they'll go through a battery of, of interviews with, with some other folks on my team. Um, and then as I get later into the process, they'll come back in.
[00:16:08] I'll usually do like a 90 minute or so working session with them. 'cause I want to, I wanna understand more deeply how they think, um, and, and, and how we, and how we communicate. Um, and so we'll spend some time in kinda a scenario doing, doing work together. And then we'll spend a little bit more unstructured time together.
[00:16:25] Usually it's like some back and forth q and a. They wanna know about me, we wanna know about them. Maybe we'll have a meal together. Um, and so that's another few hours time.
[00:16:34] David: Hmm. Yeah, it's, it's interesting 'cause when, when, when I think about, know, you mentioned this to me when we were preparing for this, is like the number of hours may work
[00:16:45] with Yeah. is
[00:16:48] Daniel: there's there's like two, what is there, 2,100 hour work hours in a typical work work year or something to that effect, right? So if you're gonna hire an exec and they're, you're giving 'em a four year vest, you know, that's like [00:17:00] 8,000 some hours that they're gonna be here. So if you're gonna spend six or eight, or 10 or 12, or whatever it takes to get the job right, you know, do it because the, the cost of getting it wrong is enormous and the, and the opportunity of getting it right is enormous.
[00:17:12] And so the investment in time for hiring someone like that is, is tremendous. Now I should say, not every job is like that. You know, most people aren't running around hiring C-level executives at a scale past business. And so, you know, you have to be, you have to be smart about what's the right investment, what's the right trade off.
[00:17:26] In fact, I was talking to a customer saying I was, I was talking to a customer, um, just last month and he said, you know, um, 'cause we were honed in on, they had, in their case a certain percentage of their hires that I was categorizing as failures. That in other words, you hired a person and within six months the person was no longer at the business.
[00:17:45] And I thought kind of every time that happens, it's a failure. And he said to me, no, it's interesting. He said, for a lot of our roles, that's very true. But some roles he's like, I really want, um, I really wanna experiment. I really wanna try a bunch of different things out. I don't [00:18:00] know what's gonna work yet.
[00:18:01] And I think there's probably something better than what we've tried before. So I wanna put a bunch of irons in the fire and if most of them don't work out, but one of them is a home run, it's all worth it. So it was almost like a little bit of a portfolio approach where
[00:18:11] David: Hmm.
[00:18:11] Daniel: he, he thought if I don't make a couple failed hires, I may not be taking enough risk.
[00:18:15] And so that may also, like, that may not be you, like it's different by role, but I. But you know, like I say, unfortunately there's no substitute for thinking, like is is quite nuanced. But yes, if you're hiring a job that you've done a lot before and is kind of routine. So I think of like most SaaS businesses, they hire a lot of salespeople.
[00:18:32] They hire a lot of programmers, they hire a lot of customer support people. Um, if I think about a e-commerce business, they hire a lot of, you know, pick and pack warehouse people. They hire a lot of customer support, you know, customer service, you know, reps. They've hired hundreds of these over and over and over again.
[00:18:47] Like you can get it down to a real science and you can do it, you can measure it statistically, and you can, you can shrink the interview funnel to like just a bare minimum so you can work really fast. Like those are the kind of optimizations you can do when you make the same hire over and [00:19:00] over and over again.
[00:19:01] But if you're hiring an executive at a firm, you know, the optimization is just get the hire right, no matter what.
[00:19:06] David: You know what's interesting? Um, with a lot of companies that I work with these days, I'm realize the, the repeatability in like the sales motion or the engineer or the, these things that you're talking about. I fully, I agree with that a hundred percent. If, if. They then have the ability to performance manage those people, right?
[00:19:30] Because if not, you can end up with, if you don't have the machine on the backend, you end up hiring a bunch, a bunch of these people. 'cause you feel like, oh, we've done it a hundred times, but you don't have that performance management machinery to ensure that only the best people stay. Does that make, does it?
[00:19:45] Daniel: Yeah. Well, performance. When you say performance manage as a verb, it's a euphemism for firing, right?
[00:19:49] David: Yeah. Yeah. Yeah.
[00:19:51] Daniel: Um,
[00:19:51] David: well,
[00:19:52] true.
[00:19:52] Daniel: like, well, so I think there's a few things in there. 'cause I think you're right. You know, you gotta be able to identify who's succeeding in the job. Um, [00:20:00] clarify what that even means for the people who are trying to do it.
[00:20:02] Um, arm your managers with the opportunity, you know, with the, with the tools that they need to, to give, to give their teams the opportunity to, to grow and, and to succeed. And then, yeah, to identify people that's not working out for, and, and, and move quickly to, to fix the problem one way or another.
[00:20:15] Absolutely. And I think, um, what, what I've found is that great hiring is actually an incredibly powerful management tool. Why do I say that? The reason, underlying reason why so many managers fail to move on from mediocre performers, nobody fails to move on from terrible performers, right? If someone's just a tragedy, like everybody can get rid of them and you know, the top performers always do well, but like that middle bucket where you're not quite sure and they're fine, but like, I don't know.
[00:20:43] The reason managers don't move on from those people often is because they don't know what it's, they don't know what, what else, like, or if I get rid of this person, I got no one. Alternatively, if that manager, if you just imagine that manager had a hundred percent certainty that they could instantaneously [00:21:00] fill that seat with a top performer every single time.
[00:21:02] Just imagine. I like to picture, let's imagine that sitting behind you right now is a top performer and any moment I can say, David, get up, walk away. That top performer's gonna sit down in your seat instead, right? Not, not realistic, but just as a thought exercise, like, well, you'd be on your best behavior, you'd perform better.
[00:21:20] And as a manager it'd be so easy for me to to know, like if you're not the top performer. I can swap you out for one. Real, real well. So,
[00:21:26] David: a
[00:21:26] good
[00:21:27] Daniel: so, you know, if you picture like picture, I, I, I don't always like to use sports analogies in business 'cause they don't always land, but just like, go with me for a second.
[00:21:35] If you picture an NBA basketball team, NBA basketball team has like a dozen or 15 people or whatever it is on the bench, right? That's it. And every year there's a college draft and they're allowed to pick like three or four more people, right? So now they have 19 and they gotta get it back down to 15. So they take the 15 best and there's no room for B players.
[00:21:53] That's it. It's just like they rank 'em and they just keep who they can can and everyone else goes. Every year there's new amazing talent that can [00:22:00] come in that's younger and faster and you know all the rest. And you know those people, they do a really good job of making sure that they only keep the best talent.
[00:22:08] And so, you know, that idea of having great hiring behind you as a manager, uh, really supports the idea that you then also really effectively focused on performance
[00:22:21] David: that is probably the biggest fear of
[00:22:24] Daniel: So I've seen it.
[00:22:25] David: I will let this person go and then who's gonna do their job?
[00:22:30] Daniel: Yeah. And my, and you're going, well, you know, gosh, my recruiting team is kind of, it's like inconsistent and like, doesn't always work. It takes forever. Like blah, blah, blah. You know? Well, if you don't have that problem, if you're like, no, no, no. I guarantee you that every time I open a role, I'm gonna hire a great person.
[00:22:46] Okay. So you have a great person already. Great. You don't, why not make one?
[00:22:52] David: Wow. Um, you, you talk about, you know, the company has scaled, I mean, [00:23:00] tremendously obviously over these years, and, um, and how has your job
[00:23:08] Daniel: Hmm.
[00:23:09] David: changed over that, how over that period of time?
[00:23:14] Daniel: in almost every way. Um, right, because when you're getting started, um, you know, there's just, there's only so many people in the room. I mean, we started, we hired two programmers and a part-time designer and, you know, built a product and got out to market. Um, you know, versus now, as I say, I mean, I'm, you know, I'm leading a company of, you know, 700 and some people.
[00:23:36] And so it's a lot of leading through others, you know, and, and a lot of communication. I like to say that, you know, my job is CRO, which is Chief Repetition Officer. You gotta say the same things over and over again. You gotta focus people on like the few priorities that matter, um, and, um. And, you know, so I started my career as a programmer.
[00:23:59] I have a [00:24:00] engineering degree. And I remember when I was getting started, I remember hearing CEOs talk about this thing of like, oh, you know, when you get to be a scale leader, your job is to set the culture and the vision and to lay out the priorities and to communicate. And I'm thinking like, bull crap, like you're just saying that 'cause you can't do anything 'cause you're like out of, you know, it's like you don't have any useful skills.
[00:24:22] And now that of course I'm, in that same seat, I'm like, oh, it is definitely a skill as I'm far from perfect at it, it takes a huge amount of effort to get right and it has a lot of impact. Um, and at the same time, like I said earlier, you know, I don't have a corner office either. And so, you know, I spend a ton of time talking to customers, talking to employees all over the organization, looking at details and numbers, looking at our product, reviewing designs, sitting in business reviews, looking at our sales funnels, like all the stuff.
[00:24:52] And it's not that I'm smarter. Than anyone else, um, you know, in the company. Um, but I do, I do have a, the [00:25:00] broadest purview I do, I do ultimately have the opportunity to be curious about any part of the business. Um, and so and so, you know, I, I take that really seriously too, and I try to get down into the business as much as possible.
[00:25:12] It's very easy to, to stay, to float above it and sort of stay disconnected and I worry about that.
[00:25:18] David: I think that that balance, what I have seen talking to people at your stage and even my own experience is you kind of, you start sowing the weeds then you kind of get pushed to swing the pendulum to beat that chief repetition
[00:25:35] officer and, and all of that. And then you realize actually there is a balance there where you can add a lot of value in the weeds still,
[00:25:44] Daniel: Agreed.
[00:25:44] David: but you can't really take any initiative to do your, you can't like do an initiative all by yourself because the company gets to a
[00:25:53] Daniel: That's right.
[00:25:54] David: you can't, you almost will break the machine if you,
[00:25:58] Daniel: You got, you gotta be really, you [00:26:00] gotta be really careful. I've, I've said before, the analogy is like, um, is like, uh, I'm like a bazooka, like it's a really powerful tool,
[00:26:07] David: Yeah.
[00:26:08] Daniel: But it's not the right tool for every job. And you know, if you're trying to perform, you know, inner ear surgery with a bazooka, you're gonna really make some big problems.
[00:26:17] Um, but there's some problems that only a bazooka can solve. So in some ways, being the CEO O is that, and I think, um, you're right. Like, look, I don't write a single line of code. I don't solve a single customer support issue. Um, you know, or, or do any of the other in new rule things that, that our, our company does.
[00:26:32] Um, and, and so, but, but, but I do get involved in lots of those things. And so I, I think about, um, there's a lot of ways to be a leader. I don't have a monopoly on it, but, but for me, what I always think about is like when I pop into someone's field of view, I. Outta nowhere, how do I, how do I be effective?
[00:26:52] And recognizing there's like tremendous power imbalance. There may not be a whole lot of familiarity there. Um, it may sometimes be like, they all [00:27:00] know me, they see me all the time. Like, I mean, I know this person's name or who they work for or whatever. Um, but yet we gotta get something done, you know, kind of quickly together.
[00:27:08] And so how do I set the context? How do I set the culture? How do I make it safe that those things can happen? And so you just, you have to be really thoughtful or mindful about the weight of your words and how you show up in, in those, um, in those, in those conversations.
[00:27:22] David: the weight of your words. I think that that's so important. Even if a smaller co as a smaller company founders,
[00:27:31] especially the ones that have low ego, you think to yourself like, what's important about me? Yeah. I'm the founder, but like, I'm just a regular
[00:27:38] Daniel: Some dude.
[00:27:39] David: I'm just, you know, but when you speak, when you speak, people take it as gospel. They take it as this is, and I, I used to have people tell
[00:27:48] Daniel: Yeah,
[00:27:49] David: my head of people used to tell me, she's like, Dave, you're sitting at the lunch table in the office. Talking about something, you, you just kicked off a hundred work streams.
[00:27:58] You
[00:27:58] Daniel: that's right.
[00:27:59] David: appreciate [00:28:00] that you kicked
[00:28:00] off because you were just having a conversation about an idea that you had. You know, and, and I said, wow. I was literally just having a conversation at lunch thinking, not thinking anything, frankly. And
[00:28:11] Daniel: Yep.
[00:28:12] David: happens. And the weight of your words, when you understand actually the weight, you can use that though also to, to, to, to the advantage.
[00:28:21] Daniel: You got it. It's just you're not, you're not, you're not a run of the mill employee. And, and, you know, I, I, um, bristle sometimes you hear people say, oh, we're all family here, or, Hey, like, you know, I'm just a normal, no, you're not just a normal employee. No, we're not a family. It's a business. And you're the boss.
[00:28:37] Like live with that. You know, and then, and then, and then work with that. Use that to your point. Use that in ways that are gonna help and, and be effective. I was in a meeting with all of our customer facing teams. We had offsite, um, uh, earlier this month. And we were doing a bunch of training and a bunch of skills development.
[00:28:56] And as part of that, we did some role playing. Now, role playing is already hard. [00:29:00] Every, everyone hates role playing 'cause it's hard and you're awkward and you screw it up a bunch of times. And the whole point is you do, you know, you practice, you make your mistakes on the practice field so that way you know, you can, you can execute when, when, when you're, when it's, when it's for real.
[00:29:12] And so it's gonna be. It's gonna be awkward and your people are gonna get it wrong. And I'm sitting there in these, in these role plays and, and to your point, you know, going from table to table, when I show up at the table, everyone's like, oh my gosh, like, Daniel's here. Like, right. You know, this is like, they're sweating and they're like, I'm like, hey.
[00:29:26] So you just have to, you just gotta recognize. And, and you know, for me, you know, I've found an approach of just naming it and being like, Hey look, this is gonna be awkward. And, and the things I just said to you, like, just make sure to say out loud 'cause they dunno what you're thinking. Be like, listen, the whole point here is to get all the bad reps out of the way, uh, on the practice field.
[00:29:44] So like, make your mistakes right now. Um, that's what we're here for. And if you're making mistakes now, every one of those is one step closer to doing it really well later. And then you just have to think about the balance of like, praise to criticism and like, and like the, again, like that weight of your words, like [00:30:00] you might say something in a way that is, um, heard very differently than you intended.
[00:30:06] Unless you're super careful and you can really throw someone off and, and you just, you end up creating risks and you end up creating problems in your business. And so, I mean, obviously you wanna try to be nice and you wanna try to be supportive in general as a human being, but from a business standpoint also, like you gotta recognize you can, you can really scramble the eggs unless you're, unless you're, unless you try carefully away.
[00:30:25] David: I think, I think that, uh, one last thing there is, I think one, one of the things I tell people, I just wrote about this recently on LinkedIn about how important company meetings are all hands, you know? And I think that's the opportunity to use those, the repetition, the weight of your words. But again, a lesson I had is would say stuff that wasn't necessarily run by the rest.
[00:30:47] Like I didn't share it with the rest of the leadership team. And they'd be like, Dave, now you said that Now I'm gonna have all my people coming to me asking this. And we started doing a lot more
[00:30:59] Daniel: Yeah. [00:31:00]
[00:31:00] David: the all hands as the company got bigger so that the leadership team could all see the all hands, they could ask their questions.
[00:31:06] I don't, does that resonate? Like, does that.
[00:31:08] Daniel: Yes. Um, and, and, um, I, I, I've been, I've been trying to find the right balance there. I mean, for sure what we did, I mean, you asked about how things have changed. So one thing is like, when we were little, we did these, you know, a and IAMA, right? Ask me anything.
[00:31:23] David: Yeah.
[00:31:24] Daniel: And it was great. Like, I would stand up, we were 30, 40, 50 people.
[00:31:27] I would stand up in front of the room, be like, okay, a MA what's on your mind? And people would raise their hand and shout out a question I would shout out, answer. It was great. It was, um, it was authentic. People asked the questions that were on their minds. It was like super efficient way to get information to people.
[00:31:41] And then at some point we got to like 75, a hundred, 125 people. And the same, um, event design, let's call it, had the opposite effect. And it was like, you're unprepared, you're kind of rambling, you got some stuff wrong. You took some of your leaders by surprise, all the things you said, right? It's like, [00:32:00] wait a second, I'm doing the same thing.
[00:32:01] But because the context has changed, the impact has changed. And so we had to re-engineer it. And to your point, we need to review the questions ahead of time. I don't have all the answers anymore. I don't have low business in my head anymore.
[00:32:10] David: right,
[00:32:11] Daniel: know about a certain HR policy, like I have talked to the HR team, you wanna know when a certain feature is shipping, I gotta talk to the product team.
[00:32:17] And so we did a little bit more prep and that helped. It kept things on the rails. So we've been iterating on these for years. I think we got to a point last year where I'm like, you know, these are actually feeling a little over prepared. And we're avoiding those type of mistakes that you talked about.
[00:32:31] I'm not saying the wrong thing, I'm not stepping in front of someone who's gonna be taken by surprise, but people aren't getting, people aren't getting the real me in a sense. It's too watered down. And so, one thing, we've tried a couple things recently that I think have had good impact. One is like, let's just, let's just make sure that of other things I'm saying, uh, you know, to, to the entire company or to most of the company, um, some of them are riskier or you need to be more careful than others.
[00:32:56] So in those cases, yeah, you can write out the whole script. [00:33:00] If people wanna know anything about pay, anything about benefits, anything about that is affecting like that stuff, you know, don't wing it, read, read it. On the other hand, if people wanna know about vision, they wanna know about strategy, they wanna about policy, even difficult things.
[00:33:15] They wanna know how we're tackling certain problems with the company or in the culture or with competitors. You know, we can prepare ahead of time, let's look at our key points out, but let's write some bullet points and then I can talk to them.
[00:33:25] David: Mm.
[00:33:25] Daniel: And so it's just like, just
[00:33:26] David: I
[00:33:27] Daniel: thinking
[00:33:27] David: I
[00:33:28] Daniel: bit less one size fits all and then, and then, you know, you can be a little bit more.
[00:33:31] And then the other thing is like, let's recapture some of those smaller groups. And so I don't just have to talk to the whole company. I can go to department meetings, I can go to team meetings and I can get in that room that I talked about with 20 or 30 people and people can raise their hand and I can feel questions on the fly.
[00:33:45] And that works really well too. So you just have to continue adapting to, to, you know, the change and just think about what's good. Left behind, how do we recapture that and what new problems are we happening? How do we iron them out?
[00:33:56] David: so you've, through the years, you know, you've raised a, [00:34:00] a, a number of rounds of, of
[00:34:01] Daniel: Hmm.
[00:34:02] David: Um, and the last one was with TPG, um, I think 21 was, was when you did that deal. Um, when you think about the investors that you've kind of brought around the table over the years, how, how, let's, let's start early stage.
[00:34:18] Daniel: Yeah.
[00:34:18] David: stage. When you were raising those first rounds of financing, what were you looking for? Investors,
[00:34:25] Daniel: I mean, the money like this. No, but I, I say that, I mean, I'm not just trying to be clever. Like, um, you hear this a lot of like, oh, like what do you look for an investor? What's important? I'm like, I got news for you. And nobody's, people don't like to say this in their tech run article. They wanna sound important, but it's like most of the time you don't have any choices.
[00:34:46] If you get your one term sheet and somebody that'll write you a check, you take it. Like for most businesses that are trying to raise money, that's the answer. And that was the answer for us for a long time. It was very infrequently. It never, not that it never happened to us, there was a moment where we [00:35:00] had some opportunities, but like generally speaking, the rounds that we raised, we had one investor.
[00:35:05] And so our, what I was looking for was like, why are the money and, you know, sign the paperwork. Um, having said that, uh, and I can tell some of those stories of like what it was like, and I think it's important too because I think, you know, people kind of look at, you know, you talked about some of the success that we've had as like, oh, you know, it must have been a certain way.
[00:35:22] Like, well, no, like, it's, it's a struggle for everyone. Um, so I'm happy to talk about some of those too. But I guess, um, you know, to your question, I do feel that we've been really fortunate in the investors that we've brought in. I think they have all been incredibly, um, value additive and important to say, not destructive.
[00:35:43] 'cause I've heard tons of horror stories and seen a lot of stuff secondhand, um, that would. You know, curl your toes about, um, the, the, the behavior sometimes of investors and boards with regards to the companies that they invest in. And I just feel really fortunate that we've had [00:36:00] supportive, smart, helpful, um, you know, partnership oriented investors from the very beginning until, until now with TBG.
[00:36:06] David: Hmm. so let's talk about those early,
[00:36:11] Daniel: Yeah.
[00:36:11] David: rounds. Um. How many people you, you think you pitched? Like, let's say first round of real institutional money, how many people did you pitch before you got the Yes.
[00:36:21] Daniel: 60,
[00:36:23] David: Wow.
[00:36:23] Daniel: I don't know all of them. Like it was, um, you know, the, the,
[00:36:27] David: of them.
[00:36:28] Daniel: you know, the the struggle, the struggle at first was, was even before institutional was just getting our seed capital together. You know, we were trying to get half a million bucks to hire those two programmers and build and build, you know, kind of V one and, no, not, not exaggerating.
[00:36:43] We failed. We literally just couldn't do it. Um, and it wasn't until my co-founder and I decided that we had to commit our own money to get things actually started, and we were fortunate enough that we could do that. So we had, we had a few bucks saved away, so we put in the first check, and after that, we were able to [00:37:00] catalyze the rest of the round and bring in that, you know, a few hundred thousand dollars before any institutional money just to get, you know, the V one, you know, even built.
[00:37:08] And I only say that to say, you know, it's, it's, again, like there's a, there's a whole industry out there making it look glamorous. Um, and, and there's a lot of selection bias to the people who have been through it successfully that turn around and talk about what a great idea they had and how many investors and how oversubscribed they were.
[00:37:24] And that's just not reality. It's just not any more than, you know, you watch a sitcom and you think that that's like a documentary about a family. Like it's not, it's just, it's just, it's, it's a story. Um, and so, you know, I just like to be real with people. Like it was a struggle and, and we really failed.
[00:37:40] Um. Now the another thing we did, I think, well through that struggle, through that period was, um, was, uh, we thought at the time we were raising that seed round again, the goal, when you, when you're venture backed, there's no such thing as one round of [00:38:00] venture capital. If you're raising venture capital, you're gonna continue raising venture capital, you know, maybe forever, but certainly for a long, long time.
[00:38:07] And so you always have to think like, you know, there's that phrase like, are you default alive or default debt? And at the beginning you order to make revenue, you know, you're default debt, you raise the money. If nothing changes, you're gonna spend it all and go to business. So how do you get to that next round?
[00:38:19] That was our thing. How do we get to our series A and we wrote the story right then. In other words, as soon as we had that seed capital in, it was like, how am I gonna raise a Series A? What are the things that they're gonna wanna see me having done in order to write the check into my series A? Is it a certain amount of revenue?
[00:38:37] Is it a certain amount of customers? Do I have to have shipped a product? Like what are the things that they're looking for? And then based on that, back out an actual plan. Like what are we gonna do? When, in what order? What are we gonna prioritize and deprioritize to get there? And that's kind of how you get to your timeframe of how much money are we raising and how long does it have to last?
[00:38:54] And what are we gonna do? And so 18 months or 24 months later, we can be at this place and, have a good chance to [00:39:00] raise the round that we need to, to continue going and then rinse and repeat to your series B. And so
[00:39:04] David: that advice a lot.
[00:39:06] Daniel: and so, we did
[00:39:07] David: advice a lot. I like that advice a lot.
[00:39:11] Daniel: thank, thank you.
[00:39:12] David: basically do your pitch deck. Basically do your series A pitch deck at the c do your series B pitch deck at the a.
[00:39:18] Daniel: You got it.
[00:39:19] David: like that advice a
[00:39:20] Daniel: That's right. That's right.
[00:39:21] David: it's also almost visualizing, you know, where, where, what am I,
[00:39:25] Daniel: Yes,
[00:39:25] David: do I want to be pitching at that moment?
[00:39:28] Daniel: right.
[00:39:29] David: want to be pitching? What do I have to do to get to that
[00:39:32] to
[00:39:33] Daniel: right. You know, the anal, the analogy in the product world is like, write the headline. Right?
[00:39:36] David: Yeah.
[00:39:37] Daniel: You know, it's like, write, write the, write the press release of, you know, when you ship this product, like what you're gonna say about it, you know, or when you've, you know, had success with this product. Like, what are the things you're gonna brag about?
[00:39:46] What's gonna be important and work your way backwards to the product plan. You know, from, from there, it's kinda the same thing. It's like envision and clarify that the goal of where you need to get to it and be, and let's be clear, when you're, when you're venture backed and, and losing money, like [00:40:00] that's your only goal is get to the next round and keep going.
[00:40:03] And so, and, and, you know, and then it became really easy to figure out what to do in what order, in order to get there.
[00:40:08] David: I have, you know, I have founders that I talk to and they tell me, you know, I pitched 20 people and I got all these nos, and like, I guess that's it. And I'm like, you the number 60. I talked to someone the other day for the interview. It was 80. I talked to someone 90, like
[00:40:24] Daniel: I mean, let's be clear. Our, let's be clear, our series DDI pitched I think 40 firms and had basically given up. And then the last one, I mean, you know, it's always the last one, right? I mean, but like you only won. So number 41, you know, we, we were connected with, and thank God they were fantastic. Everyone's been an incredible investor now for, you know, eight years.
[00:40:48] But, um,
[00:40:48] David: it's like, it's like getting married, kind of somebody, you know? It's like finding the person who sees the value
[00:40:53] Daniel: that's right.
[00:40:54] David: you're doing, believes in that vision aligns with like, and. There are so many [00:41:00] thousands of investors in the, in the world. Like that one for
[00:41:03] you exists, but, but it may take a hundred meetings to find that.
[00:41:07] That
[00:41:07] Daniel: that's right. And, and again, like every, you know, look, uh, you know, handful of businesses in a generation are gonna have this like, you know, magical thing where everybody wants to invest in their, you know, if you're Facebook, you know, great, don't listen to my podcast. You
[00:41:19] David: Yeah. Yeah.
[00:41:20] Daniel: you don't need to, you don't need my advice for most, for most of us, even very successful startups.
[00:41:24] Like, that's just not your reality. And, you know, your business has issues, your business has problems, and those translate into risks and questions on the other side. And not everyone's gonna get comfortable with those risks, and not everyone's gonna have good answers to those questions. And it may not even be you.
[00:41:37] It may be like, well, the person that you pitched doesn't have the right political clout today. Because they did a deal last year that went south. And so when they show up at the Monday meeting with their deal memo, the partner rolls their eyes like, it's nothing to do with you. You know? Or like, oh man, I invested in some HR tech company eight years ago and it stunk.
[00:41:55] I'm not gonna do that again. Like, okay, that's not my problem. And so you just, there's [00:42:00] an umpteen million reasons why any given investor isn't gonna invest in you, and a lot of 'em have nothing to do with you. Um, so in a lot of ways it is just a numbers game. And I think one of the problems, I mean obviously there's just like the how do you keep going?
[00:42:11] And it's like hard just to have the, the, the, the optimism and the wherewithal. But assuming that, you know, one of the problems is, you know, you try to make you, you try to make adjustments after every time, oh, if I didn't do it right, it's because of this. I'm gonna change my deck, I'm gonna reorient my pitch.
[00:42:24] I'm gonna try to get a little further whatever. And like, there's a, there's an art there to knowing when is, when is it not the pitch? And just like, keep throwing your pitch. And now it's just about, you know, finding the right, finding the right person to connect with it. Um. And what I found was at some point the less you, like, if you stop changing your pitch after some point you've like, now you've got it, figure it out.
[00:42:46] And you kind of know when that is. Then you actually get better at delivering it. And so just keep delivering it over and over again until you find that. And so you, I was thinking when I'm go, when I was going into a venture round, like at the beginning, you, you aren't that confident in your pitch 'cause you haven't delivered [00:43:00] it a lot and you don't know what's gonna land and you're gonna get a bunch of questions.
[00:43:02] But after you've done it, even like four or five times, you know, you're like, okay, everyone's gonna ask the same question and they're gonna have this thing.
[00:43:09] David: Yeah.
[00:43:10] Daniel: You tweak those bits in the pitch and then it's just about, okay, now I just gotta get in there and just like blast through the phone book and get to the right person.
[00:43:17] David: so you, you know, you were building in New York early, I mean, like I said in the intro early.
[00:43:21] Daniel: Early, early.
[00:43:23] David: early, early, and, and there was not a lot of, there were not a lot of investors. There was like, it was, it was early.
[00:43:29] Daniel: Hmm.
[00:43:30] David: How would you describe those early days? Like, you know, what was the ecosystem like? What was, what was it like to build here and why
[00:43:39] Daniel: Yeah,
[00:43:40] David: to build here?
[00:43:41] Daniel: well, ecosystem is putting it a little bit grandiosely for what it felt like. Um, so to set the stage, it was 1997 when I started my first business in, in New York. Um, I had quit my job as a programmer. I had an opportunity, very fortunately, with a guy that I had gone to engineering school with, um, to take on a project at a [00:44:00] big bank.
[00:44:00] And based on that assignment, we quit our jobs, started a business and, and hung a shingle. Um, you know, at the time there was no free software. Uh, there was, I mean, there was no, like the development tools alone to build. To build software cost thousands of dollars. I mean, you could buy, like the Microsoft Development Suite was like $999 for the entry version.
[00:44:24] Um, there was no cloud. You had to like buy hardware and stick it in a room and air condition it and plug in phone lines, um, to do things like store files. I mean, I'm just like, stuff that you take for granted now. And so, and then, and then when you built software, you had to like burn it on CDs and drive it to your customer in a taxi.
[00:44:40] And so there was a huge amount of friction and a huge amount of overhead required just to get anything started and shipped. There were a handful of businesses, like a dozen in mostly lower Manhattan, where the phone companies and um, and the electronic, like, uh, stock market exchanges had been, where there was connectivity, literally physical [00:45:00] wires that went on into New York Harbor, like connected to the internet.
[00:45:03] And like if you signed a long-term lease in one of those buildings with this wired for internet program, it meant that in six months or less you'd get ISDN lines into your, into your space. Which was, which was great.
[00:45:14] David: months,
[00:45:14] Daniel: Yeah. Six months, you know, so there wasn't a whole lot, I guess I would say there was, you know, I like to joke, it was, um, you know, it was double click and it was time Magazine's website.
[00:45:25] Um, that was the internet industry in New York, um, in the, in, in the late nineties. And there were people doing, you know, there was like this group called Cyber Suds. Everything was cyber back in the nineties. It was Cyber Suds, which was like the get together where like the few dozen of us that were doing some kind of technology or, or interactive media as they called it, businesses would get together over a, over a beer and talk shop, but there were no investors.
[00:45:48] There were no, you couldn't go on like Saster and just read about how to do all this stuff. You know, there were no, there was no knowhow. Um, and, and, and there were certainly no in, and there were certainly no investors. [00:46:00] Um, so, I mean, partly that's why my first business didn't work. I mean, there's a lot of reasons, mostly 'cause I was, did dumb.
[00:46:05] I didn't know what I was doing. I was 23 years old and I didn't have any money. But, um, but ultimately, um, the, all the support concepts, all the podcasts and all the Reddit threads and all the stuff that you can learn now wasn't there. And so you just were, you just had to make each mistake on your own.
[00:46:20] And they're all very expensive.
[00:46:21] David: Hmm, Hmm. What do you think about the New York ecosystem today?
[00:46:25] Daniel: Yeah, if I, if you asked me then to picture what it's become now, I would not have believed it even when we started Greenhouse. So now, fast forward from 1997, uh, you know, to my next business, which, which we grew up in New York and, and I sold in, in the late two thousands, and we started Greenhouse in 2012.
[00:46:43] Even then, the idea that you could start a big successful software business in New York was not at all accepted wisdom. Um, in fact, I remember going to, um, Saster, uh, conference in California where I had never, I had never really spent any time in San Francisco. I didn't know what it [00:47:00] was all about. It was kind of, I was in New York guy, but I was on stage at SR.
[00:47:05] In, I wanna say 2012 or 13, and someone asked me the question from the audience. They said, do you think you can build a successful business in, in New York City? Like, it's never been done before. And I just thought that was the weirdest question. I remember kind of like, what are you talking about? And I said like on stage I was like, you know, there's a huge city there.
[00:47:26] There's skyscrapers and millions of people. Like it's a whole thing. You should check it out. And people kind of chuckled. But the point I made was like, I think there was a very narrow concept of what, what, what a, what the ingredients for success were like, well, have you been in Silicon Valley? Have you been in a big software, you know, company before these things that didn't, we didn't call it SaaS at the time, but, you know, and I felt like, man, there's a ton of talented people in in New York, you know, that have, that have done all kinds of things that have sold and that have built lots of complicated software.
[00:47:55] You know, and I'd done a lot of that. Um, and I don't need that many of them, you know, I [00:48:00] mean, in the scheme of things, it's a city of, you know, 8 million people. I need like two programmers to start this company, you know? And beyond my wildest dreams, I, I, I'd have a hundred employees. It just didn't seem like that big of a barrier.
[00:48:13] Um. But yeah, like the capital wasn't here. There were some investors then, then, and I met with most of 'em, none of them invested. So I'd kind of go out to California where there's a lot more optimism and a lot more, I, you know, um, idealism about the growth possibilities. And I'd raise money. Um, and then I'd come back here and, and, and build a company.
[00:48:31] David: You know, I, I had an investor tell me one time when I was fundraising for BetterCloud in the early days. He said, I'll, I'll give you a term sheet as long as you move you. And your whole team to California. cause
[00:48:41] Daniel: Yeah.
[00:48:41] David: how you're gonna build this company in New York, you know? And it's like,
[00:48:45] Daniel: Well, I mean, look, I think if I'm, correct me if I'm wrong, but I think the first time we met was at a workbench event.
[00:48:50] David: yeah,
[00:48:50] yeah, yeah. It
[00:48:51] Daniel: All right. You don't know how, maybe a decade or more ago, but, um, you know, that's, to me that's emblematic is workbench. I. Was like [00:49:00] incubated by like RR Donnelley, like financial printer company.
[00:49:03] You know, they printed like those prospectuses you get in the mail and you like buy a share of stock and they're like, oh, like maybe this software thing is worth something. Let's like rent out a little office and put a couple of folks in and see what happens. And it's like, no, that's like huge. And, you know, and so they've been, you know, there's these now like institutions, like I said, you know, um, there's so many communities of tech startups here.
[00:49:24] You know, the New York, uh, tech meetup became a huge driver of the culture. Companies like Foursquare, you know, or ver you know, things like that. So over the last, you know, it's unimaginable, but when we started Greenhouse, like none of that was here to see what's what's come of the New York Tech ecosystem.
[00:49:41] I think particularly the New York B2B tech ecosystem and even more particularly the New York HR tech ecosystem has really become quite a force. Um, and, uh, it's great. I mean, I'm really thrilled about it.
[00:49:51] David: Awesome. So la last question here. What, what is the biggest challenge you've ever faced at Greenhouse, and how have you [00:50:00] overcome that challenge?
[00:50:01] Daniel: I only get one.
[00:50:03] David: Yeah.
[00:50:03] Daniel: I mean, it's just, you know, that's the, there's a, there's a lot. Um, I mean, when you ask that question, I, I gotta think about Covid because, you know, in, in 2020, um, you know, we had been on a real growth tear. The business was growing gr you know, like, like rapidly. Um, and then all of a sudden everything changed.
[00:50:21] You know, we, you know, we didn't see it. We, nobody knew what was coming. In fact, we, we tried working from home. We said, you know, there's all this talk of like in office may not be a thing. So like, we're gonna try out working from home on a Thursday. We're gonna do it for a couple days. We'll work out some of the bugs, no pun intended.
[00:50:38] Um, and then, you know, if and when we do have to go work from home, like we'll have already done it. Well, we never came back. We went home on a Thursday and before that weekend was up, we told people not to come back to the office and we never went back to the office. Um, so then a few weeks later, um. Uh, there were 13 million unemployed, uh, in the, [00:51:00] in the jobs report in one week.
[00:51:01] To give some context, a typical unemployment or a typical jobs report has a swing of a, maybe a few hundred thousand plus or minus 13 million unemployed and one in one go. Um, as a, as a person selling hiring software, that's a terrify, that's an extinction event. You know, and we're thinking like, is this, are we done?
[00:51:23] Is this ever, are we ever gonna sell software again? Are any of our customers even gonna be around to renew? Um, meanwhile, I had moved out of the city with my wife and our, at the time, 8-year-old, into my in-laws where I was living in the. Uh, childhood bedroom of my brother-in-law, my, my wife said, brother, you know, running the company, you know, on a, you know, on a, on a, on a foldout chair in, in a bedroom.
[00:51:49] Um, and then these, like PPP loans came out and there was all this debate like, should we take it? Should we not? Do we, you know, everybody needed the money, but it was like, is it risky? Are we gonna get audited? Do we, [00:52:00] do we really need the money? Do we wanna hire people? We ended up laying off a bunch of people, um, which turned out to be a mistake, and we tried to hire them all back in a few weeks because as we now know, in retrospect, um, you know, the economy, especially the online economy, really took off on an hypergrowth.
[00:52:15] Um, and we grew 30% after that in that same year. And so, yeah, it was just like from a interpersonal perspective, um, from a, from a leadership perspective, I mean, those are some of the most challenging and raw conversations I've had. With coworkers and colleagues with investors, and board members with people.
[00:52:34] I just would, I mean, I would just remember having calls just with strangers or like people I knew through the industry but never met, you know, I would, we'd like DM each other on Twitter and then get on a late night phone call and be like, what the hell is going on at your company? How are you dealing with this?
[00:52:47] You know? And um, it was, it was brutal. It was, it was grim.
[00:52:52] David: And, and what has happened now since, you know, have you brought people back into the office? Are you still fully remote?
[00:52:59] Daniel: Yeah. Well, [00:53:00] like I said, so, you know, we, we never, we never ended up going back into office. What, what we did see was, so after that initial period in April with the, with, with the jobs cuts and, and we did a layoff and then quickly realized our business going through actual hyper growth, we started hiring like, like mad.
[00:53:15] And because everybody was already working at home, we were hiring people wherever they were, mostly not in New York. And we thought, well, this is great. We can, we can, um. We can hire people all over the country. We can draw from an incredibly broad talent pool, um, where often, like Greenhouse might be like a great tech job for them if you're living in Atlanta or you know, Minneapolis, where there may not be a ton of SaaS companies in your zip code.
[00:53:41] Um, and so we grew the business now, you know, multiples over the next, you know, 18 or 24 months by the time people started even contemplating going back into office and should we do it part-time or two days a week or whatever. Most of the company, most of the employees were nowhere near an office that we even had.
[00:53:59] And yet we [00:54:00] had invested a lot in our, in, in kind of the online culture. Um, so, so much of what makes Greenhouse Greenhouse happens in Slack and Zoom and so it's not that, it's not without its challenges building an online culture and, and a remote first company. It is, but so is building in an office company.
[00:54:19] And so I, the way I see it is like, I think we've developed kind of, um. Almost two separate workforce markets. There's a workforce market for people who wanna work in offices and one for people who wanna work remotely, and we hire from one of those and not the other. If you wanna go into an office five days a week and work with colleagues, I don't have that to offer.
[00:54:42] On the other hand, if you don't wanna worry, am I gonna have to told I have to go into my office one day? If you don't want to have to buy a, a, a buy or rent, uh, housing within a short commute to your office that you can afford that, oh, by the way, since you're only in the office three days a week, you have to have a home office in your expensive New York apartment two [00:55:00] days a week to work from anyway and like get childcare that can work around that flexible schedule.
[00:55:04] All that stuff is really hard if you don't wanna deal with all that, you just want to be in a remote first company where you can do your best work no matter what. You know, we can definitely offer that. And so it's just like a different formula for success with its own rewards and challenges. Um, it's been great for hiring diverse talent.
[00:55:19] It's been great for things like time zone coverage, um, and uh, and for being really flexible with, with, with sort of where the work gets done. Um, but yeah, it's been, um, and, and today we still are, you know, remote, remote first.
[00:55:32] David: It is interesting 'cause actually, you know, it became the standard obviously during
[00:55:36] COVID and that everyone was hiring remote and
[00:55:39] Daniel: Yeah.
[00:55:39] David: hiring all over the the country. Now actually you have a, I would say now it's becoming a competitive advantage probably for hiring because as everyone's going back to the office, you have to your point, at least that population, if there's those two cohort,
[00:55:53] that
[00:55:53] Daniel: You got it. Yeah. We, we connect, we connect to the people that, you know, that want that. And, um, and so, [00:56:00] you know, I think it gives us an advantage for, for those folks and even like. You know, I talked to, um, either candidates or, or employees and, you know, at other workplaces where you're allowed to work from home, but everyone doesn't do it.
[00:56:12] It's hard. You know, you're the, you're the person on Zoom and everybody else is sitting on a conference room. Like, it's, you're, you're, it's hard to be the equal participant there. Whereas in Greenhouse, everybody's another box on, on, on, on the same Zoom. Everyone's kind of participating in equal ways. And then when we get together in person, like I said, I was at an offsite a couple weeks ago with our 300 of our employees.
[00:56:30] Like, yeah, we all get together, you know, pretty regularly and, and, you know, do the things we, we need to do in person.
[00:56:36] David: so fast forward three years, it's 2028. What does greenhouse look like in 2028? Where, where, what are you, exci, what are you most excited about for the next three years?
[00:56:45] Daniel: Uh, boy, a ton of stuff. I would say, uh, anytime I think about the future and the vision, I keep going back to our mission of, of, you know, helping every company in the world become great at hiring. And why do I say that and answer your question? Because while I'm thrilled that we've got, you know, [00:57:00] the, I.
[00:57:00] Thousand of customers we have, there's millions of businesses you hire. And so if I look at it in the future, I think like, okay, who are those next businesses that we need to connect with and what, what, what do we need you to get there? Whether it's companies that are like larger than our current customers, co companies in different industries, even companies in different parts of the world where we don't yet work with them.
[00:57:20] Um, and so, and one part of your answer to your question is I think our customer base is larger, more diversified in different industries, more global. The other though is kind of in some ways more interesting is like, yeah, like if you're gonna try to make them all great at hiring. I don't think we've done that fully yet.
[00:57:37] I think a lot of our customers have really made some improvements. Great. I'm super proud of all that. Um, our customers make hires faster and cheaper. They, um, build more diverse teams. They're more inclusive, they give great candidate experiences. All that is true. And yet every single one of 'em has giant opportunities to do better.
[00:57:53] And so I think we're more deeply solving more valuable hiring problems all up and down the hiring stack. I think [00:58:00] the way our customers find candidates and connect with talent, the way they move people through the process, the way they make choices and assess candidates and talent and even like the way they make offers and hire people and onboard them, like all of that is tremendous room for improvement.
[00:58:16] More so with AI than ever before. And so there's a ton of ways in which a lot of those problems, I think we're gonna make a ton of headway over the next few years. And so I think even just like the fundamental relationship between how Greenhouse, um, how you work with a software product is just changing so much with the conversational, um, and agent based AI interfaces that I think the whole idea of like what even the product looks like will be radically different.
[00:58:44] David: so quick transition to your background, and you mentioned third company, greenhouse, third company, and you talked about starting that first company when you got that big project.
[00:58:53] Daniel: Yeah.
[00:58:54] David: did you always know you wanted to be an entrepreneur
[00:58:57] Daniel: I did. I did. I was, I was, [00:59:00] I was always entrepreneurial as a kid. I was very fortunate. First of all, I come from a, a line of entrepreneurs. My mom was a, an entrepreneur. She started a business at, at our kitchen table when I was seven years old, maybe,
[00:59:10] David: what?
[00:59:10] Daniel: um, doing, um, corporate relocation services. So it's like a little bit obscure sounding maybe.
[00:59:18] But if you picture where I grew up in suburban Detroit, there were like a lot of big auto companies and they would relocate teams and even executives from city to city, even country to country. And so when you're moving 50 executives from Germany to Detroit, each one of them needs a tour of the area.
[00:59:33] Some advice about where to live and where to send your kids to school, what church you should join, all of it. Now, today, you know, maybe that's, a lot of that is online, but back then you were taking a map from aaa, you were putting little stickers on it to show different apartment buildings and driving 'em around, you know, to show 'em, show 'em stuff.
[00:59:49] So that was like a big service. So, so she started that business really helping a friend who was moving to town ended up being the biggest provider of these services in the world. Um, and so, and grew the business. Yeah. Yeah. [01:00:00] It was, yeah, it was a big, big, big business. And, and she was a successful, successful entrepreneur.
[01:00:03] So, and I was, as a teenager, like me and all my friends worked at my mom's. Company. So obviously that was like, I feel super fortunate to have had that opportunity. Not everybody does, but it exposed me early on to the kinds of day-to-day problems that occur in office and in a workplace that can be solved with technology.
[01:00:23] And so even just like the opportunity to take a lot of the manual work of like producing these packets for clients, I saw like when I was 15 or 16 years old, um, word processing was new and I started building macros to like take something that had been like a few hours of work and make a button that you could push and produce the packet.
[01:00:41] Like I did that when, as a kid, when I was in high school. So, and I loved it. I was like, oh great. So like, I don't know, the first thing about a consumer, you know, I don't know anything about fashion, you know, or whatever, like, but B2B, like solving business problems like I connected with early on. So I always knew I wanted to do that.
[01:00:56] Um, and even like in college, I was the, like [01:01:00] over summer vacations, I was like building. Database products for school districts I knew, or for like, businesses that I found and stuff. So that was just like my, that was in my bones for a long time.
[01:01:12] David: Literally from
[01:01:13] Daniel: Yeah,
[01:01:13] David: I'm
[01:01:13] Daniel: I've always loved it.
[01:01:14] David: age.
[01:01:15] Daniel: still love it. I mean, the fact is like, um, to me the idea that, you know, you can sit there now, I don't get to do it anymore, hands on, but, but nonetheless, I have a role to play.
[01:01:24] Like the fact that you can sit there and just conjure something in your mind, put a little bit of effort into getting it down into code, and then you can step away from it. Other people can like, use it and day to day they're satisfied. Their jobs are easier, their businesses are better. Like, it's a magical, it's a such a satisfying, uh, creative feeling for me, which I know most people would say.
[01:01:50] HR software is not creative. But I think if you're, to me, like, and I think a lot of folks that, that do what we do, that idea of just like helping solve a, a, a sticky [01:02:00] business problem that no one else has figured out how to do. And you have incredibly satisfying
[01:02:04] David: So
[01:02:04] Daniel: I,
[01:02:05] David: were, and you and I have talked, we, we met, we, we had dinner one time for one of the, uh, I think that cloud and y event. We were sitting next to each other at the dinner. And, um, you're a little bit ahead of me, I think, with my kids, um, with your kid, you know. Um, how have you balanced that, you know, you in the early days was the early days of
[01:02:24] Daniel: yeah. Yeah.
[01:02:25] David: family.
[01:02:25] Like how did you deal with that?
[01:02:28] Daniel: Well, it's hard. I mean, you know, you know, there's no, there's no easy, there's no easy solution. You know, I like to joke, like, you know, the, the balancing, you know, the formula that you need to follow is, you know, you know, you think about eat right, exercise, get lots of sleep, spend time with your spouse, um, spend time with your kid, be involved in their school, be really dedicated leader at work, pick one.
[01:02:54] You know, it's like pick maybe one and a half. Like, you're just gonna have to like, prioritize and make some choices, and you're not gonna be able to be [01:03:00] everywhere all at once. It's true. The other is, I am very fortunate. I have a, you know, I have the resources to be able to like, get some help with, you know, childcare and things like that, that not everybody has.
[01:03:08] So that's, that's a part of how I, I was able to solve some of those, those issues too. Um, look, I think early on, um, when we were, it was literally just John and, and I, my co-founder John and I, um, in my apartment, I had a newborn and I had a brand new business. Like you didn't have. Like, I have to say at the inception stage, like everyone has problems in their business, but the inception stage, your problems are all fun.
[01:03:32] So we had, we had fun problems. I didn't have operational problems. I didn't have any customers, I didn't have any employees, I didn't have any investors. Now those were my problems that I didn't have those things, but you know, it's just, you can sit there and you can feed the baby and put 'em down for a nap and then go back into the living room and, and bang out another few pages on the deck or, or send out some emails.
[01:03:47] And so I balanced in the early days doing that. Um, but yeah, there was always a permeable barrier, I think between home and work for me. Um, I remember in people that have been here at Greenhouse for 10, 11, 12 years, like they'll tell [01:04:00] you, seeing the stroller in the office, um, you know, later seeing me dial in.
[01:04:05] And we talked about Covid, like seeing me, you know, I, that, that same year, um, I had a, I had a break every afternoon at two o'clock to have a pillow fight with my kid. I mean, that was what I did, you know, had an 8-year-old and you know, two o'clock to two 15 we had a pillow fight and then I'd get back on Zoom.
[01:04:20] So you just, you know, you just have to recognize that, you know, you know, we, everyone's only got 24 hours in every single day and so, you know, you gotta make it work.
[01:04:29] David: Yeah. The, the
[01:04:31] Daniel: I
[01:04:31] David: I think the sacrifices are, you know, and, and I, I, I don't know, you know, you talk about the, the having people see that, I don't know that. most people in the company you know, know that and feel that, you know, it's like you,
[01:04:47] Daniel: yeah.
[01:04:48] David: it's kind of go full circle to what we talked about before of like, you are the CEO, you know, you are, and you looked at in a different way.
[01:04:54] And, um, I don't know. I feel that that's something that, um, maybe you were [01:05:00] better about kind of showing that to the, to the, to the company. But I think, I just think it's important because a lot of people, you know, first time founder starting a family starting, and they feel like those seven things that you mentioned before, they have to do all of them.
[01:05:13] When in reality it's, it's literally impossible. Like
[01:05:16] Daniel: Yeah.
[01:05:17] David: even, it's
[01:05:18] Daniel: just doesn't, it doesn't, it doesn't math. Right.
[01:05:20] David: Yeah,
[01:05:21] Daniel: you know, that's why I kind of, that, that's why I take care to say like, well, you know, I was fortunate that I was able to hire a great nanny early on and take a lot of the childcare responsibilities. Um, I should mention, my wife's also an entrepreneur, very successful.
[01:05:33] And so,
[01:05:34] David: right,
[01:05:34] Daniel: she wasn't sitting at home, you know, changing diapers either. Um, and so like when you're looking and you're going like, geez, like, how does other, how do other people do it? I don't, you know, it's like, well, that's how, and so, you know, it just gets just a re it's just a reality. And so I, I just, I'd just like to be honest about that because I think it's, um, sometimes you hear stories in the press or people, you know, try to make it seem that they're superhuman.
[01:05:55] Like, oh, you know, that person seems to get it all done. What's wrong with me? It's like, nothing's wrong with you. [01:06:00] It's like doesn't all fit into one box. You gotta have other ways to solve those, solve those issues. And, you know, look, you know, you, you said the word sacrifice earlier. I, I would say it's slightly different.
[01:06:10] I mean, you may, you know, I mean, I think I've made choices and, you know, you've had to, you've had to prioritize some, some things over others. But, you know, I feel a tremendous amount of, you know, fortune for the opportunity to do that. Um, and you know, there's a lot, you know, I, you sometimes hear people, oh, like, nobody realizes how hard it is to be a CEO.
[01:06:30] Like, get over yourself. It's, come on. You know, it's a hard job to go break rocks for 12 hours a day. Go work at a McDonald's. Like, that's a hard job. This is a, this is a tremendous privilege.
[01:06:40] David: Knowing everything you know today, um, through all this experience you've had, what is the one piece of advice you would go back and give yourself before you started your first job ever?
[01:06:51] Daniel: You know, I think for me, I'll say two things if I could. I'm sorry. One is, I think [01:07:00] is, is really decide what matters most and, and like what and why for you. It's different for everyone. And you know, a lot of people I see that are starting out or that are, you know, new entrepreneurs, they get caught up in a lot of the stuff that you hear.
[01:07:15] Whether it's the, you know, get to raise venture capital. That's really a big milestone. I wanna go public one day, that's a big milestone. Or I wanna be on the cover of Time Magazine, or whatever it is. That's your thing. Like, if that's really your thing, great, but it's, it, those things don't always happen.
[01:07:32] And for me, one of the, one of the early lessons that took me a bit to learn, but once I figured out was a real unlock was like, okay, here's what I actually care about. I wanna work on, on a mission, on a, I'm solving a problem that that's meaningful, right? And I wanna work on a great team. That's my thing.
[01:07:49] And by choosing the path I've chosen, there's a lot else I throw to the wind, right? It's risky. It doesn't always work out. You may or may not make money. All the problems we just talked about, about balancing all that, those are all [01:08:00] there. But I can guarantee you I get to work on an interesting mission.
[01:08:03] 'cause I set the mission and I get to work on a great team because I hire the people. And so like once I knew why I was doing this thing, it made it a lot easier to stay committed to it because there's no other path I have where the things that are most important to me at work I can get than what I'm doing. And so that was a real, that was a real insight. I think the second thing I'll say is just a, as we started to grow and scale some of the stuff we talked about earlier that was hard to learn of like, how do you really make space for other people? How do you really listen and get the benefit of their perspectives?
[01:08:33] That's not easy. And you know, I think I could have done a better job earlier on, you know, uh, if I had some, if I had that advice of just. Being better at listening and, and, and just being a better, um, being more empathetic to, to other folks.
[01:08:49] David: Daniel, I really appreciate this. I, I think you've said a couple of times how the stories that are out there are, you know, [01:09:00] over, you know, celebrate
[01:09:03] Daniel: Yeah.
[01:09:03] David: I don't know. You know, and, and I, I couldn't agree more. It's, it literally, this conversation is like, this is why I started podcast is to have conversations like this.
[01:09:11] 'cause I think I. This is actually what people need to hear when they're going through the journey. 'cause this is real. Everything you've shared is like this. There aren't, there isn't a answer to this thing. There isn't, you know, it's not all perfect. It's not all easy. It's not all up into the right every day.
[01:09:26] So I really appreciate this. Thank, thank you for doing this with me.
[01:09:29] Daniel: Yeah. Thank you so much. Always great to catch up with you and, um, you know, uh, looking forward to seeing you again around in the future.
[01:09:35] David: Awesome, awesome.
[01:09:36] Daniel: Thank you.
[01:09:37]David: And thank you everyone to listen for, for, for listening and hopefully enjoyed this. Please share it with your networks and we'll see you for the next episode of not another CEO podcast.[01:10:00]
