Culture, Values, Raising Money + The Role of CEO - Brett Hurt (Part 2)

Today, we’re continuing our conversation with serial entrepreneur, Brett Hurt. If you missed the first episode, make sure to listen to learn the resources Brett uses to scale, how to communicate with investors and a lot more.

This episode is jam-packed with insights and actionable advice from Brett. We spend a lot of time talking about exactly HOW to create a thriving culture. Brett shares a unique but powerful way to develop your company’s values so they stick and are memorable. Brett’s built amazing cultures in his previous businesses (including Bazaarvoice, where they won best place to work as a small, medium and large business) and his current company, data.world.

Brett also dives deep into the role of the CEO. His unique perspective will cause you to rethink and possibly redefine the role of the CEO.

Listen now:

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Topics include:

• The most valuable conference Brett makes sure to attend every single year
• The criteria Brett uses when deciding whether to invest in a company or fund (currently Hurt Family Investments is invested in 55 companies and 12 funds)
• When is the right time to create your core values in a companies growth
• How to create values that reflect your company’s personality
• How to get your teams involved in creating your core values
• Why the founders of data.world chose to make data.world a B Corporation and why you should consider creating a B Corp
• What does passion have to do with creating a business?
• What is the role of a CEO?
• What to do when you have a bad day as a CEO
• How being fully present where you are is more important than work/life balance
• The out of office message Brett uses to let people know he is not available

Show Links

• Netflix Culture Deck
• Conscious Capitalism Conference
• B Corp FAQs
• The most important thing you can do to build a great startup culture
• Guardians of the Forest Book

Podcast Transcript:

Chip: We're talking again today to serial entrepreneur Brett hurt, if you missed part one of this interview, please go back and listen to it right now.

Kirk: Chip, he did a really good job in that first podcast. He offered a lot of sage advice, but in the second podcast, I think you're going to be really impressed with the practical, actionable guidance that Brett shares with us.

Chip: We've got a lot of great feedback from that previous podcast. Once again, go check it out. But what did you guys talked about in today's episode, Kirk?

Kirk: Today Brett shares a little bit about the power of operating principles - it’s a unique approach that Brett and his co-founders took at data.word, his new startup. It was inspired by Netflix and the reflections that he's had from building healthy vibrant cultures. Brett also talks a little bit about a proven and powerful hiring practice that he's used for a long time. They call it “The test.” Brett goes on and talks a little bit more about something that is very dear to him: culture. Brett lives the old adage by Peter Drucker, Culture eats strategy for breakfast.”

I love that saying.

A lot of businesses say that they really want to prioritize culture, but how do they really go about doing that in a way that is measurable and actually gets the impact that they desire?

It's something Brett has spent a lot of time developing throughout his professional career.

Listen in as Brett's explains about how he goes about focusing on culture

Brett: We were inspired by the Netflix culture deck at Bazaarvoice actually. One of the things is that Bazaarvoice was rated the number one company work for in Austin when we were small then medium, then large. One of the ways that we achieved that was the way we hired and we've got that same hiring method here at data.world, but another way is that we actually just prioritized culture.

Every off-site we had as an executive team, we would discuss our culture and those are very intense conversations. We were really passionate about having the best culture that we possibly could have and a lot of that is grassroots as well.

I don't want to make it sound like it was just executive team discussing that. I've always liked to know how do we get it? How do we get everybody to engage in that discussion? We had values at Bazaarvoice, and we had we had a cultural deck that described how we came up with those values and that type of thing

But at data.world one thing that made it different is that from the beginning, I've had three other really amazing co-founders. There's four of us all together and from the beginning, we started to build out our operating principles deck that just said here's how we're going to work. Those operating principles, are you can think of it as like the operating system of the company.

Every time we get together with the broader management team we always discuss those operating principles and say, “What are we living? What do we not? What's missing? What are some great examples so that?”

Future people, when they join us, they can say “Oh, here's actual evidence that we've lived this” and they can go talk with people about how we've lived that.

It's constantly evolving and that I've talked with Reed Hastings, by the way of Netflix and that is exactly how their deck evolved. I've also talked with his longtime former Chief People officer. He told me the same thing.

One thing that happened though, recently, that I'm particularly proud of and I think is really a different approach to values. I was attending the conscious capitalism CEO Summit, which you know for any of the CEO's that are listening to this it is the best leadership event I attend every year.

It is phenomenal. You have amazing CEOs. They're pouring their hearts out on stage about the purpose and about all types of cultural things that they've done, and how they've treated their various stakeholders, and it will lift your spirits. It is unbelievably awesome, and one of the things that when the speaker said at this last conscious capitalism CEO Summit is he said, “You know, one thing you should ask your team individually is: what are their personal values that they bring in to the company?”

And I thought, “Gosh that's a really really interesting way to do it!”

Because we don't yet have values at data.world. We have our operating principles, which you could distill down values from. But we don't have like a set of values. By the way, we didn’t have a set of values at Bazaarvoice until we were over one year old either. At the beginning of Bazaarvoice, if we had put together core values, it just would have been me and Brandt's values as co-founders. It wouldn't have been a shared experience, and we wanted first prove that we could just even build a viable business and then we'd have something to actually you know say well. What's the best of how we how we did that what were the best attributes that led us to get there, and we involved the whole company in at the time.

I took that suggestion hard at Conscious Capitalism. I came back and I ask everybody in the company. I said “Hey, please send me you're one or two values that you bring into the company every day. What are what are your best attributes that you bring here every day?”

And it was awesome responses, I got back and got a hundred percent participation. And then I put together a Google sheet that had each person's name and the one or two values that they wrote down, and then I distilled that down into what are the commonalities between those? People would use sometimes like a different word for passion, but it was the same it was the same thing. And so I combined them all and I got it down to either five or seven values that are that are not this fabricated, tops down thing. It's actually Grassroots.

It's the actual words people say are their best attributes that they bring in to work every day.

This came from all the people at the company. We're 30-35 people now, it was really really really cool to see what those words were. This is my sixth business as an entrepreneur and so the first time I've ever done values that way. But I think it'll be much more enduring because it literally was a completely shared experience.

Kirk: I really appreciate you sharing that because I think too many times people feel this urgency to get them figured out like you said they're just fabricated, if you do them too early, and I really like that process asking people what they bring in.

There's companies that are a little bit further along or a little bit older and in their age, and they're still struggling with that because they did fabricate them at some point and/or they quit living them or whatever whatever happened and what I oftentimes encourage CEOs and their teams do is this because you're exactly right. It's got to be a reflection of the people that are there it can't be something that we're just kind of idealistically layering on to the organization.

Sometimes I'll say, “Think about who are the 5 people that you think, if you could hire a thousand more of those people, you would do it at the drop of a hat. And what are their values that you like?”

It's like most things, it feels overly obvious and embarrassingly simple, but we just we don't do so I really appreciate you sharing how you got to the core values.

Brett: Yeah, and I think if you did it with that technique you just mentioned, I think you’d come to the same answer because the reality is if someone is saying, “Okay, What are the values of the people that I'd hire them at every single company I ever started, I would recommend them constantly?”

Those are things that are actually embodied in the answer as well because they're identifying with that person like. Like you know one of my values for sure is how passionate I am. I do not I do not do a start-up unless I am extremely passionate about the cause and that passion drives me through the very tough times because there's lots of dark moments in a startups life.

It's not all roses. There's really really hard. And you know the neat thing is that? Unprompted just asking people, the values that they bring every day? The most common value of data.world people is passion. I thought that was really cool. By the way, that was the first core value that we came up with it Bazaarvoice as well.]

So is that just a coincidence? I don't think so. I try to hire extraordinarily passionate people. I've got a job interview process, which weeds out people that aren't truly passionate. It's very validating and very cool to see. We just won our second annual best place to work award here, and we also just got named in the top 10% of all B corporations in the world, which is really really cool.

Kirk: Yeah, and name some of the others that are B Corps, by the way. For the people that don't know what a B Corp is, if you can give a real quick explanation because that's wrong important.

Brett: Sure, a B Corporation is a for-profit enterprise and its companies like Patagonia Ben & Jerry's. Warby Parker, and they typically have a public social mission associated with the company. For data.world, I told you what our mission is. Obviously, with Warby Parker they have a similar model like Tom's where for every pair of glasses you buy they donate a pair in the developing world where literally people cannot see.

In my opinion, it’s a more evolved form of being as a corporation. The basis of a B Corp is a C Corporation. There are more successful C Corporations than any other form of Corporation. That's a good base to start with, but then it has all these additional benefits, and there's no downside of being a B Corp.

There's only upside and Millennials and the Next Generation are much more purpose-driven than prior Generations, so they're much more attracted to companies like that, so it's helpful from a recruiting standpoint, but you know it's only helpful from a recruiting standpoint if you actually live it.

There's a cool FAQ, by the way, Kirk, that if you want to you want to provide it to your listeners, I can send it to you, and you could provide as a link.

Kirk: Yeah, please do that and we'll put that as a link into this that would be great. I'm guessing for a lot of people that are listening, they've never heard of a B Corp before ans sure weren't probably aware of some of the companies that you named and the fact that you guys are named in the top 10% in the reason.

You're invested in 55 different companies in 12 different VC Funds. What are some things that you look for?

Brett: While this is actually going to tie really well to what were just talking about. The number one thing I look for in a Founder is whether or not they're really passionate about the cause.

Because that's going to get them to run through walls and recruiting amazing team including their initial clients their initial advisors. I think a lot of people think that entrepreneurship is cool, and they get involved in an incubator or whatnot and they really haven't found their core reason for being, they really haven't found their core passion, and you can tell when someone has and part of what I'm looking for is passion.

Let's say that you are a person who really was spending your entire life trying to solve cancer and let's just say that you found the cure for cancer. How would you act? Would you act kind of like: that's cool? Or would you be shouting from the rooftops?

I want entrepreneurs who are like that and whatever their segment is. Not everything that people are working for is maybe as important as curing cancer, but it's really important, and it's really important to them, and it's really important to the people they're going to do business with them, and so if they if they kind of act that way and can't teach someone how to act that way. You can't make them become passionate about what they're doing or you're really fighting a losing battle.

The other thing that I look for is that I'd look for a team which a co-founding team, which already has someone then on that team that knows how to build the solution. They already have someone that knows how to sell it and they already have someone that knows how to service it.

I run away from teams that say, “Well, we've got this amazing CEO who knows how to sell it, this amazing person knows how to service it, but you know what we've outsourced all of our development to India or China because it's cheap now... it's not a big deal.

I’m pretty much going to run away from that because if you have a team that embodies all three of those things and they were there at the conception of birth, they are going to figure it out. They're gonna have a much higher probability of figuring it out in the person. In India, while it's great that they're getting this gainful employment and in terms of offshoring and that's increasing their standard of living.
I think all that's great, and I'm a big believer in the World is Flat and all the that Friedman stuff.

But that doesn't mean that they're going to be passionate at all. You know it's this bit labor to them like they're just one of their many clients. Whereas, if you're the CTO/Founder, it's everything to you for that business to be successful. When you start a business you put yourself out there like nothing else.

You know most people will never start a business because it's very easy to go work for a Facebook or Google. We're recording this on the cusp of Thanksgiving, and if you go to your Thanksgiving dinner with family, and you say you work for Facebook. They're going to be like, “Oh, wow that's great!”

You say you work for data.world, they’d be like, “What is that? [00:16:00] What's what's data.world again?” It'll be obvious in hindsight. In the beginning of Facebook, that's what people were saying “What is what is that? What is this Facebook?” By the way, the people that work for Facebook at that moment, in the beginning, they had to be pretty brave. Because it wasn't clear. They didn’t even have a monetization model for a long time, so, it takes a lot of grit to actually do it.

The number one thing that's going to get you through that is passion and a lot of times like a CEO will have this kind of offshore thinking that they don't want to give up equity or there's all these other reasons, that all these other excuses for not doing that and they're just they're missing a real opportunity to have someone from the beginning that's going to be just undying as passionate as they are.

Kirk: A couple things that I want to clarify. One is, your right, you can't fake that passion. I was thinking, as you were sharing, I was thinking about the times that I walked in the doors with the people at Bazaarvoice early on and the meetings that I spend with the people at data.world and that passion is you can feel it. You can see it. You could sense it, and I've been around a lot of other teams and you walk in the room, and it's just it's not there

Brett: There's there's nothing like it. Tt is so much fun when you're on that type of journey. It's hard, but that it is so much fun. I cannot tell you how much fun it is when you're when you're in that zone, and you've got that team. Around you that everyone is equally passionate about it, and and just everyday is we're all working our hearts out to make something that we can hold our heads high and say there is no doubt that data.world has already made the world better, but we are just scratching the surface and in a tiny way of what's possible.

Kirk: I found it seems like and it's kind of the essence of why I'm doing this podcast and then what it's named after the For You Leaders Podcast. I find where people are passionate. You've never started something you weren't passionate about the cause I do have people and I have seen people that are passionate, but they're passionate about creating their own personal wealth and financial Freedom about having their name up in lights, whatever those things are and those that's a different kind of passion than what you talk about obviously.

But it does give back to that cause and it's nothing you can put in some of these job descriptions. It's nothing that you can require of somebody. It's who they are and that's why I think that that hiring process you know once again, and I'ma say this again at Lucky Seven.

What's the name of that blog where you talk about that hiring process?

Brett: It's called the single most important thing you can do to build a great startup culture. The answer is: how you recruit because I start out in that post saying everybody would ask me how do we create this amazing culture at Bazaarvoice? Well it actually started with the foundation and started with the people.

By the way one of the things I don't think I've ever talked with you about this. I think your listeners would find it pretty fascinating. But about fourteen years ago, I was back at Wharton, getting my MBA. I was seeing the founder of Staples speak there. And I saw someone raise their hand in the audience. It was time for QA and asked a question that was actually on my mind, “What do you think about passion? Like what do you think about it? You know everybody tells me I need to be passionate about whatever business I'm going to start. What do you what do you think about that?”

And Tom like immediately fired back. He said passion is totally overrated. Completely overrated. I can show you a bunch of people who have golf stores in a small one-off retailers who are really passionate about Golf and they're never going to make any money. I'm passionate about building a big business, and I don't care what it is, and I'm passionate about this Market because it's a huge market, and just forget about passion.

In my chair, I’m floored and thinking oh my gosh. I can't believe I just heard that and he just said that in front of all these students.It actually took me years to think about that. My personality type being ENTJ, I like ruminate on things for years/ I approach things now that there are many ways to measure success and nobody would say the founder of Staples is not financially successful.

And maybe physically, he's totally successful, too. I don't know, but I'm just not wired that way at all.

Kirk: I'm not wired that way either. I like how you put that: there's different ways to define success, but think about leaders that are truly passionate for the cause, they are really for others and and not necessarily for themselves and just seeing the mark that they've made having done this for over 20 years and worked with literally close to 10,000 different leaders now, I think I've got at least some pattern recognition around. the ones that are making a difference or the ones that really are passionate about the cause and interestingly enough surround themselves by those kind of people. Just see what they're doing because it's not just about what the business does, but it's what's happens through the business and the people that are there.

Brett: Yeah.

Kirk: How do you think about the cash efficiency of what happened to Bazaarvoice on your journey to go in public? You've raised some money at data.world and are applying a lot of the same principles and philosophies around cash efficiency and how to go about doing that.

As a CEO who's gone out and raised money and people have trusted you with their resources, what is the time to hire more or expand offices or do things that that consume that cash? I know you have thoughts and beliefs around that, share those a little bit if you would.

Brett: That's hard because there actually is no magic crystal ball for that. I mean I'll tell you that it was at Bazaarvoice.

We we kept everybody in one office, the Austin office, so that we could constantly share ideas with each other. If someone brought in a new client, we could talk about how they won them. We had the gong where people would hit the gong, everybody would gather around. They would tell the story about the deal or the story about a new partnership or the story about a new person joining us and that the rate of learning was very very fast. It may not have been as fast as it is at data.word now that we have slack and this kind of cacophonous, amount of learning going on, but it took until we were I think over 10 million in sales before we decided to open a second office in our second office. We opened was in London. And the reason we picked the London and the reason we opened that second office is that a lot of our clients were starting to lean on us on working with their European offices by people like Procter & Gamble wanted to wanted us to start working with their European Brands, and of course we want to do as well. Nobody wants to buy globally unless they're going to be service locally.

Could you imagine buying a car, like a German car like a BMW, and you don't have a dealer to take it to in Austin or Colorado? You would you go crazy right if you had to call over to Germany every time you want to get serviced. Well, the same thing is true in enterprise software. However, if you're planning to buy a car, I recently came across a website called ZeMotor.com, where I found a wide variety of used cars to choose from. The user-friendly layout and detailed listings made my car search experience smooth and hassle-free. In a market flooded with online car platforms, https://www.autozin.com emerges as a beacon of reliability. Their approach, which emphasizes authenticity and user satisfaction, is truly commendable.

And so to make that go well, we took our culture standard-bearers in Austin and asked them if they wanted a tour of duty to open up the London office. And that became our blueprint to open up offices all around the world for Bazaarvoice. That method worked extremely well because they need to be some of our top performer's people

They were in five or six offices around the world - talk about amazing experience. I mean, there's part of me that was jealous of that. I was already married with kids, and you couldn't just like freely move about in the world, but it was phenomenal for them.

In data.world, we're in the early stages of this business. We have, as I mentioned, 35 people, and most of those people are in engineering because of the technical complexity of what we're building is so great. This is so much more technically complicated than what we built in the early stages of Bazaarvoice, but it's also incredibly powerful, and it's what needs to be built. It's what the market actually needs.

We're at to state with data.world right now, we're frankly we're not going to do much more hiring until we get the revenues to a point where it justifies that to maintain capital preservation.

And all types of optionality that go with that and by optionality I mean having enough capital in the bank where you see something, that's really catching fire, and being able to easily deploy that without going back out to the market to raise money.

One of the things that Mike Maples Junior told me recently, he is a very good friend, and he's an investor in data.world is he kind of has this Maples Law, where every time you raise money, you're going to run out of that money in 18 months, and I said well, You know we've raised three years of capital, Mike. You know. This is back when we raised our nineteen million dollar round earlier this year, and he's like, “Yep. You know you'll feel the same thing.”

It's not at all that. We've still got lots of capital in the bank. There's no way and we're already almost 12 months past that event and we've got years of capital left in the bank, so that comes down to discipline. It can get addicting to hire people.
Data.world is nothing without great people. There so many great people constantly contacting us that want to work for us, and and it takes a lot of discipline to say no to that especially when you have the money in the bank where you could say yes, but we had that money in the bank it at Bazaarvoice to where we could have said yes all the time to everything. And a