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Rob Grazioli on Co-Founder Chemistry, Billion-Dollar Valuations, and the Power of Staying Small
35 Plays28 days ago
Rob Grazioli (robertgrazioli.com), a Managing Partner at Bread, an agency of founders for hire and a pre-seed venture fund, joins host Dan Freehling (contempusleadership.com). Rob and Dan discuss Rob’s path from college to founding Density, a company that reached a billion-dollar valuation, and how that led to Bread. Rob shares insights on maintaining co-founder relationships, the importance of staying small and nimble, and the challenges of achieving product-market fit. The conversation also touches on organizational culture, the role of curiosity, kindness, and a "say yes" mentality. Rob discusses the strategic advantages of Bread's approach to venture capital and shares advice for founders and leaders on building successful and sustainable businesses. Recommended reading: “Design Is a Job” by Mike Monteiro and “The River of Consciousness” by Oliver Sacks. Show notes at forwardlookingleadership.com.
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Transcript
Introduction to Forward Looking Leadership
00:00:01
Speaker
Welcome to Forward Looking Leadership, a podcast for visionary leaders building future ready organizations. I'm your host, dan Freeling. I'm the founder of the coaching and consulting practice Contempest Leadership, developing the leaders and teams you want in charge through cutting edge approaches and common sense solutions.
What is Bread and its Origin?
00:00:19
Speaker
I'm honored to be joined today by Rob Grazioli. Rob is a managing partner at Bread, an agency of founders for hire and a pre-seed venture fund comprised of five former founders and investors who've worked together for over 10 years and grew a previous product to a billion dollar valuation.
00:00:36
Speaker
Listeners, you're in for fascinating insights on making great products, common founder mistakes, organizational culture, and much more from a thoughtful designer and builder. Thanks for joining me on Forward Looking Leadership, Rob.
00:00:47
Speaker
I'm super stoked to be here, Dan. Really excited to talk with you. So first, the the story that led to Bread, the the original company, is is really interesting to me. Could you share that story with listeners of how you came up with this this idea for Density and how that business grew into Bread?
00:01:04
Speaker
Yeah, of course. um So a long time ago, or what feels like a long time ago now, I was in college and met my now co-founders really as part of a competition for MLB.com. It was the first time I had really any significant exposure to building a website.
00:01:24
Speaker
And ultimately, for the first time, found myself more excited about anything ah than I'd ever felt before. And it's this sort of love for building that I think formed that initial bond between me and my my co-founders.
00:01:40
Speaker
We met some other people in the area that sort of got us into entrepreneurship. But ultimately, we didn't have an idea, but we were around a lot of people with ideas. So we decided to try to get them to pay us to build their ideas.
00:01:54
Speaker
That turned out to be a terrible idea because no one had any money at an early stage. And a lot of the people were were also students. But ultimately, word spread. We started landing clients in the area.
00:02:06
Speaker
And within our first year of running what is essentially a services business, we did a million dollars in revenue. And ah yeah, it's super weird. That was such an important milestone for us, of course,
00:02:19
Speaker
We didn't spend it well, but um got that ah that first year was really cool.
Density's Evolution and Success
00:02:25
Speaker
And we were borrowing a model from, at the time, a popular business called 37 Signals, where any additional profits profits from services went into net new product development.
00:02:36
Speaker
So over the course of two, three years-ish, we built and launched eight different products. ah Seven of them didn't amount to anything significant, cool in their own right.
00:02:50
Speaker
But the eighth wound up being a product we called density. ah Basically, one of our founders had the idea to install a Wi-Fi based people counter inside businesses.
00:03:02
Speaker
And one business in particular sparked this idea. We every day at two o'clock, the entire team, all 12 of us would go to a loke local coffee shop. If it's already crowded, we're going to be there for a while.
00:03:15
Speaker
So we'd end up having to leave. So we really wanted to get one of these installed in and this coffee shop. Ultimately got it installed. It didn't work, but it launched this whole concept of ah really people counting or measuring how people use space.
00:03:31
Speaker
And at the time there was no Google wait times. So it was very small to mid-sized business focus. But ah eventually we pivoted into providing Fortune 500 companies with anonymized real estate analytics so they could optimize their portfolio.
00:03:45
Speaker
And eight years passed. ah We raised over 150 million. You mentioned we sort of eclipsed that billion dollar mark ah that you know I have a a specific relationship with. Maybe we'll get into that.
00:03:58
Speaker
But ultimately, after that eight years, I wanted to get back to day one of just finding that love for building and being part of something early. um And thats that's really how Bread started.
00:04:11
Speaker
ah Started working with other founders. Eventually, my other co-founders left Density, and we all just started to get the band back together. And here we are. It's been two years now of Bread.
00:04:23
Speaker
it's ah It's an incredible story. there is ah That is a novel. i I was talking forever there. Yes. though it's it's ah It's a really great story. and it's it's ah it's It's kind of crazy how it all played out and and led to this. and um ah you know One interesting part of this is how you maintained these relationships with your co-founders over this whole
Maintaining Relationships with Co-founders
00:04:45
Speaker
experience. And love any advice you have on doing that, on how how do you maintain and deepen your relationships with co-founders while you're building something like this?
00:04:56
Speaker
Yeah, it's truly probably the best thing about my professional career is having met these people and worked with these people for almost 15 years at this point.
00:05:07
Speaker
um Advice is hard to give. I think one, we're extremely lucky to have met people, ah two have met each other. and to have personalities that complement each other, but also interests that align, but approaches that also challenge each other.
00:05:24
Speaker
So ultimately, the way I would describe our relationship is one really built on candor. We're we're very direct with each other. There's no conflation between a professional discussion and a personal discussion.
00:05:36
Speaker
Although, of course, professional and personal life are intertwined. It's always clear when we're getting to work. And it's really under, uh, it's really supported by care and respect for one another.
00:05:49
Speaker
Um, I don't, I'd also say play and just joy of, of building things and joy of working together is a big part of what keeps us together. But, uh, ultimately it comes down to just being very direct and,
00:06:04
Speaker
ah Being willing to to have hard discussions, which sort of builds this trust. ah It relaxes the mood whenever there's something challenging because you just know everyone's going in with the best intentions.
00:06:18
Speaker
There's nothing going on around the conversation. You're in there to solve problems together. i don't know if that makes any sense, but that's the way I think of it. It makes a ton of sense. And i think it's, it's real psychological safety. I think that's such a concept that gets bandied around and, you know, people think it means all kinds of different things, but I think that that really is at the heart of it, of that.
00:06:38
Speaker
um Yeah. And a lot of the founders we work with that are solo founders, I, I feel for them to to an extreme extent. I can't really imagine how lonely those times can be where you're doubting yourself, you're doubting your company.
00:06:57
Speaker
you You have people looking to you for answers. To be able to share that with people I trust has been really an incredible gift. I'll also add five founders was hard to convince ah investors of.
00:07:13
Speaker
It usually raises eyebrows. Most founding teams, even of two or three, have a hard time agreeing on things. And we were we were double that. So that was always something we were up against.
00:07:27
Speaker
But... Ultimately, it's our superpower. When you have five people basically willing to work for less money than they probably should, ah able to pick each other up and fill in the gaps, wearing multiple hats, it it it really becomes a cheat code ah into getting to market faster, finding finding fit, and building something awesome.
00:07:50
Speaker
So... The more, the merrier. That's my advice. it's It's fantastic. And it's it's genuinely impressive that you were able to maintain these relationships over that course of time and actually were a ah source of strength for you all.
00:08:04
Speaker
So you um you mentioned um some feelings around the billion-dollar valuation. What do you mean by that?
Valuation Pressures vs. Business Foundations
00:08:11
Speaker
Yeah, I think we definitely...
00:08:16
Speaker
were part of a big uptick in venture investment that think everyone realizes has been dialed back quite a bit over the past couple of years.
00:08:27
Speaker
And I think ultimately the market allowed founders to demand really generous terms and ah demand those terms really without some fundamental proof points.
00:08:41
Speaker
Granted, I think density is a big business and has that kind of potential, but it's still an incredibly big number to live up to for for any founder. And I think there was just this mentality as a founder to try to hit those sort of benchmarks. Basically, how do you boost your valuation versus how do you build a really strong foundation? and And that's something I saw everywhere, and and frankly, even i was sort of guilty of, is really optimizing for the raise versus optimizing for ah foundational business.
00:09:16
Speaker
And that's that's one thing I'm particularly excited about now. There's definitely a change in sentiment in the market that I think leads more towards show some early revenue, show your ability to ah show show some real proof points that your product fits and is solving a real problem.
00:09:34
Speaker
And those those kinds of questions just weren't as present ah eight years ago, 10 years ago. so that's That's sort of the deal. it's just It's just a big number. And I think people should really be ready when they raise that that that kind of money to to grow and not to continue to figure out ah how to or what to build, that makes sense.
00:09:58
Speaker
Yeah, that that focus on the foundation. And now that you're on the the investor side of things, I know you advise staying small and that can that can sound counterintuitive to people who are used to this traditional venture model.
Why Stay Small and Nimble?
00:10:11
Speaker
what do What do you mean by like staying small and what are the strategic advantages of that? Yeah, and it's tied directly to that where when you're working with venture capitalists,
00:10:24
Speaker
And rightfully so they're trying to push you to grow and to grow fast. And when you haven't quite settled on what you're doing, the easiest way to try to solve that problem is to throw people at the problem.
00:10:37
Speaker
And what ends up happening is you build momentum and it's not always good momentum. And this is something i try to educate every founder I talk to about is the idea that not not all momentum is good.
00:10:52
Speaker
There's maybe signs that you're moving in the right direction and you're building a team and you're building product into it, but perhaps you haven't really explored all your avenues. And it it the the the more momentum you build in that direction, the scarier scarier it becomes to pivot, especially when people are involved.
00:11:09
Speaker
So staying small is very much about trying to stay nimble, trying to have your momentum be super intentional and ultimately just be more ah be more conscious about the resources that you're allocating and when you're when you're allocating them and what you're allocating them to.
00:11:27
Speaker
it's It's keeping it so that you can pivot and be agile and go into what's what's actually working, what's actually getting traction and making sense. Exactly. it's It's not just a... a tactical constraint of, okay, you have to pivot. You have to let people go. You have to reform your go-to-market strategy, but it's a psychological thing. it's that It's that sunk cost sort of fallacy where you feel like you're almost there, but the idea of pivoting just becomes so stressful that you delay it.
00:11:58
Speaker
And like you see this all the time where the writing's on the wall for a while, But founders fail to act fast enough. And it's genuinely that anxiety around change ah that that creates that. Even though you know you know it in your gut that change needs to happen, it's just hard to make happen, especially when your team is large.
00:12:19
Speaker
From the investor side, how do you think about helping the businesses you're working with kind of understand this and take those risks and you know make those pivots and all of that kind of stuff?
00:12:31
Speaker
I'll give you ah classic example where non-technical founders, when they need to build an application, they frequently rush to hire a quote unquote CTO.
00:12:45
Speaker
And this this is something that I've just seen so many times where that you bring in someone senior who demands sort of a high salary, who's used to running a team and whose playbook involves building a team.
00:12:59
Speaker
Before you've even built a prototype basically. And all of a sudden your burn triples, you likely overbuild create too much structure in your organization before you've really found fit.
00:13:14
Speaker
And next thing you know, you're staring at a fundraise with no customers, lots of money spent. And again, everything. it's not that anyone's doing anything wrong. It's just sort of this tendency to overcommit where in areas you don't understand, whereas it's counterintuitive to try to take baby steps into that, into that problem and try to right fit a solution, which in this case is usually finding a technical co-founder, um,
00:13:44
Speaker
not ah not someone who's trying to have a cto have CTO in their title, or just finding a really good engineer to help make your vision a reality. ah That's usually the best early option for a non-technical founder.
00:13:57
Speaker
And obviously educating yourself and trying to to be as fluent as possible. But anyway, that's sort of an example that ah that I can think of and the kind of advice we try to try to give and also help people avoid.
00:14:10
Speaker
It makes so much sense of being really cautious about letting people bring in like a whole department as a a managerial hire. And it's it's like, no, you got to be really careful that you have the the fundamentals of the business down before you would start building out in that kind of a way.
00:14:26
Speaker
Yeah. And it's going to suck early on. Like you're not going to build the perfect thing. You're not going to have the perfect process. But you need to just spend as, the goal is always spend as little money as possible trying to build the right thing, not do it the right way. There's no such thing as the right way.
00:14:45
Speaker
And anyone sort of telling you that there's a right way to go about something is almost guaranteed to be to be wrong. And a lot of those hires are people trying to do that, I think. What are some signs that you look for in terms of when a business has found fit?
00:15:03
Speaker
Revenue. It's, ah yeah, i mean I mean, because here's here's the deal. There's a difference between building something that has utility and building a business. it Building something that people use and like is just simply not a market fit. it It might be that you've built something
Revenue and Market Fit
00:15:30
Speaker
worthwhile or interesting, but you need to have validation that it's something people will pay for or else you don't really have a business.
00:15:38
Speaker
You have a tool that's interesting, but you're you're still figuring out how to have your business. Of course, there are examples that are counter to that. where a product goes gangbusters and the sentiment is there's enough users, it's valuable enough, we'll figure out how to be profitable or monetized later.
00:15:58
Speaker
But that is a small percentage of businesses. you need to You need to validate whether or not your your business model works as quickly as possible. And the only way to do that is to put a payment ah put payment in front of somebody and tell them to vote with their dollars, in my opinion.
00:16:18
Speaker
um That's what we look for. But at our stage, it's often premature. So we really try to make sure one, founders have that mindset and two, try to try as best we can to validate that there's real potential there.
00:16:33
Speaker
um And also give give founders the structure to experiment um with with pricing and and actually capturing revenue early. It all makes so much sense. And I think you're right. It's the actually having people pull the trigger in terms of buying something is, is the way that you're, you're figuring out if this is actually valuable for them in a, in a business sense more than just a, Oh, that's kind of neat or that's interesting, but it's not really a business.
00:17:01
Speaker
Yeah. I, people, people are typically generous. I find when you're showing them a product or you're giving them feedback or they're using something where people, their generosity starts to end is when you ask them to pay for things. And ultimately that's where you get real feedback about what you're, what you're building.
00:17:20
Speaker
In my opinion, fast forwarding past the, the kind of politeness and, and right to that. Yeah. That that's, it's a great piece of advice for people. And I think even for non, you know, VC backed businesses, I think that's, that just makes tremendous sense across the board for, for almost any kind of business person.
00:17:38
Speaker
Yeah. Some of the best advice, I ever heard. So like pricing's weird. It's hard to know what to charge for your product or how valuable your product is, especially if there's no direct comparison.
00:17:54
Speaker
um It's a little easier if there are other products in the market and you're just trying to build something faster, cheaper, better. if there's nothing directly comparable that that is hard to do, you can be really, you become really self-conscious about what the value of your product really is.
00:18:13
Speaker
Some of the best advice I heard was just pick a number you want to make in the next year and charge that start there. ah And let basically just your livelihood sort of be the starting point for pricing.
00:18:29
Speaker
If that becomes too easy to sell, you know, you're probably too cheap. And if it becomes too hard to sell, you know, you're probably too expensive and then you can sort of build from there. So I know pricing is challenging a lot of times for that reason, but my, when i build stuff now or launch stuff, that's genuinely where I start is what do I just want this thing to make me in a year?
00:18:52
Speaker
And what, ah how many people do I think I can get to use it? I'll just pick a number and start there and then deal with the consequences later. And it gets people past that analysis paralysis where you're, totally you know, you're trying to think about your price so much. And it's like, no, just focus on having something. You'll see if it's too high or if it's too low when you have it out in the market and you can adjust from there. And that, that seems right on.
00:19:16
Speaker
Yeah. And be ambitious. Start high. It's easy to come down. Exactly. Exactly. See what people will actually pay for. And then, and then adjust from there or increase the value of the service from there or the product from there.
00:19:28
Speaker
Exactly. Exactly. You emphasize a lot of learning from mistakes you've made as a founder and helping others
Common Founder's Mistakes
00:19:36
Speaker
to learn from these. What are some of the mistakes you made as a founder and you know how are these valuable in helping advise others now?
00:19:43
Speaker
Yeah. I mean, mistakes I've made and continue to make, I think that's always important to recognize is If this is something I'm still doing, I'm still building a business, I'm still learning all the time and I'm still making mistakes.
00:20:00
Speaker
I'd say one that I'm continually battling is rushing to the next idea. Basically balancing ambition and follow through can be a real challenge. And I think this is super common for for a lot of founders.
00:20:15
Speaker
you You have big dreams, you have a big vision. It's difficult to be patient enough to watch your bets play out as long as is required for you to actually verify if what you just did actually worked before you move on to the next thing.
00:20:32
Speaker
ah You otherwise sort of collect this great you knows island of misfit toys, so to speak, of of ideas and projects and and go to markets. um So I would say that's one thing that's so hard to do because you're trying to move quickly, but just take a day or two.
00:20:52
Speaker
every month and just check in on what all what are all the bets you're actively making, which ones should you continue to make, and removing the ones that you shouldn't before you start or embark on something new.
00:21:08
Speaker
So I don't know if you have a similar, ah similar challenge and maybe you have some advice for me. so or great he's good nice I've actually heard, I don't know what the origin of this, but I've heard someone refer to it as the half, half built bridges theory of it doesn't do you any good to have seven or eight half built bridges. You should, you should finish, you know, a whole line of business get it through so it can at least be a ah marketable product or service in some early form um before you you have 10 ideas that are kind of half complete and aren't able to be put into the market.
00:21:50
Speaker
And that's something I've tried to apply myself to. And I found that that kind of thinking to be helpful, get it over the finish line and then see. Yeah, just finish it. Right. I totally agree.
00:22:00
Speaker
And it's hard. It's it's always finishing things is always the hardest part. But one, you can be surprised or two, you can make a decision confidently.
00:22:11
Speaker
So, yeah. Anyway, I agree with that. That's definitely i think something I'm always I'm always battling. And like putting ah putting out like a good enough product, I think is another thing or good enough service to start before you're, ah you know, but dealing with perfectionism and that kind of, you know, it's not as good as it can be.
Overcoming Perfectionism
00:22:33
Speaker
Yep. um You know, and i I think about that a lot with. um any sort of materials I'll put out or something. And it's like, you know, I can i can definitely spend more time and make this better and I will down the road.
00:22:46
Speaker
But it's really important to get things out when they're ready to get out so you can get the feedback on them early. and like I like to think of it like any of your favorite bands, they're going to have early albums and they're usually not great, but there's some little bit of brilliance in there, but they don't know what that is at that point. And you can't know what that is for yourself at that point. You just have to get it out there and see, and then build on that.
00:23:08
Speaker
Absolutely. And I'm, so I'm a designer primarily by trade and there's, one of my One of my founders, one of my co-founders is notorious for just always nailing what good enough means.
00:23:27
Speaker
And it drives me nuts. I simply don't have as good of a muscle because it's a very, it's it's bias. i My purchasing patterns, the thing I invest in are are very specific to me and the kind of person I am.
00:23:42
Speaker
So I'm always trying to build something to my standards. ah which I'm not saying my standards are super high, but they're probably they're usually higher than the average, especially for the visual polish of a given product.
00:23:57
Speaker
Whereas he is able to make those kinds of compromises, it results in getting product out faster, learning faster, and ultimately viability, while I might otherwise still be trying to refine my thing.
00:24:13
Speaker
It's, it's truly the secret. If you're ah founder listening to this, this is the secret to, to really being successful is knowing when to move on. And I don't think to your point, the band analogy is such a good one.
00:24:29
Speaker
i don't think it's knowing. I think it's, I think it's just a muscle you build. That's some kind of combination of naivety and focus on the right thing. um Yeah, I don't know. i I don't know how to do it.
00:24:44
Speaker
Do you? You know, do you know the comedian Mike Birbiglio by chance? Yeah. So he has a, he has a podcast that he had Ira Glass on and I guess they've worked together on his movies and shows and things. And, you know, Ira Glass is quite the, quite the creative genius to have backing. and So he had, Ira's, Ira's advice was really interesting. It's something I think about a lot, but it was at the early stages of being a creator, your taste Oh, I've heard this clip. I love it. It's always going to outrun what you can do.
00:25:19
Speaker
um And you just have to keep going and get it to the point where what you can do eventually matches your taste. But yes early when it's inherently it's inherently going to be disappointing to you.
00:25:33
Speaker
Yeah. It's such a good soundbite for anyone trying to build something. And it's so true. Everything I look at. that I did even even a couple months ago is always crap, basically. That's what I tell myself.
00:25:48
Speaker
But it's even though it's fine, it was fine then, it's probably fine now, ah there's there is more value in me finishing it than and showing it to people than not.
00:25:59
Speaker
So yeah, love that. This is right on. It's awesome awesome advice for anyone trying to build anything out there. And and thanks for sharing it. um Any other kind of mistakes that come to mind that you've made that are particularly valuable?
00:26:15
Speaker
I think one that always comes to mind for me is I'm a designer and it's sort of in the same vein of maybe overbuilding or sort of doing something the right way.
00:26:27
Speaker
But design is ah is a researched back craft or and I think research is probably the wrong word to use, but you're designing something when you're pulling information and trying to make intentional decisions.
00:26:41
Speaker
And there there's a product we were bringing to market and it had an existing user base. And i tried to incorporate this user base into a new design, into a new product launch, trying to sort of bring this product into ah the 21st century.
00:26:59
Speaker
It was archaic. It needed to be redesigned, but I'd gone out to the existing users and really treated them as, ah really took their word verbatim on what they expected and what they needed.
00:27:13
Speaker
But I realized ultimately the way I got those users had some bias in it. And so I wound up designing a product for sort of a very niche set of people.
00:27:24
Speaker
um And I've done this a couple of times. That was one example where there was a user base ah that was large enough where I mean, I could have done a better job, but there's There was another instance where the user base was small and I was still trying to use users as like the primary mode of, of iteration, which is the advice everyone gives you is be user centric.
00:27:46
Speaker
The issue is, uh, when your user base is so small or when you don't have customers, that advice is kind of garbage. Um, you, you kind of need to trust your,
00:28:00
Speaker
gut a bit more and really do do something that you feel is valuable for the problem based on your understanding of the problem space and not not use a small sample size or early early adopters as like the best case or the the exclusive opinion should use to design your product.
00:28:20
Speaker
Um, so that's, that's a mistake I made twice in two different ways, not realizing it and wound up in some go to market flops basically where I thought I was designing the perfect thing, but, um, turns out a larger portion of the user base simply had trouble using what, what I had built.
00:28:37
Speaker
I think you have to trust your own taste and judgment when you're designing something, especially early
Trusting Design Judgment
00:28:46
Speaker
on. And it can be tempting to just follow these design thinking, human-centered design kind of principles to a T. And it's okay to have judgment and taste. And I think that's counter... I think we're getting away from...
00:29:06
Speaker
That being the orthodoxy, I think it was, for sure you know, 2010s kind of a thing where that was really the orthodoxy. But no, I mean, that's what I, that's why i ah you know, think of too. And I think that's still like taught a lot too, which is a problem. And um yeah, I think it's, it's, it's being, being willing to break from that. And just in general of any of these kinds of models, use them to your advantage, not not kind of subsuming your intelligence and wisdom and everything to them, using them as a tool, but not as, you know, the only thing you'll do.
00:29:44
Speaker
Yeah, exactly. They are, they are tools. They are not law, essentially. um And yeah, I still meet designers every day that I think emphasize these things a bit more than they probably should, especially especially at an early stage where you really don't even have a lot of the resources that people teach you ah you can use to to execute on a given product.
Balancing Designer and Founder Roles
00:30:10
Speaker
So you you kind of self-identify as a designer by training, and I know you you wear many hats as a co-founder. How have you felt your professional identity either staying the same or changing over time as you've taken on all these different parts of the co-founder role?
00:30:30
Speaker
It's always changing day to day, especially ah as ah as a founder. But I've had a lot of I would say hesitation and still still do when talking about what I do every day.
00:30:47
Speaker
And i default to calling myself a designer because i have a set of hard skills where I can essentially push pixels around and I can write code.
00:31:00
Speaker
And so that's what I am. But really, I'm a business owner. And coming into all this, I wasn't I wasn't big into entrepreneurship. I didn't, I didn't know who Steve jobs was.
00:31:14
Speaker
i didn't know what Silicon Valley was. i didn't know what being a founder was. I just started making things and, uh, started getting people to pay me to make things for them.
00:31:26
Speaker
So, and, and I was surrounded by a lot of other quote unquote entrepreneurs or founders who, from my opinion is probably a bit harsh, didn't have the same skill sets I had.
00:31:41
Speaker
And I didn't want to be lumped into that group of people that were kind of doing it just to say they're founders versus doing it because there's a problem they really wanted to solve.
00:31:52
Speaker
Um, and it's this deep kind of thing for me. I still, I still call myself a designer when really more than anything, I'm a business owner. And, uh, I don't know. That's been, so there's that, that's one thing, uh, which is kind of a big, big topic, but then there's the actual roles.
00:32:12
Speaker
Um, so I don't know, is that something you struggle with at all is like saying to people what you do ever, or is this, am I, am this, am I alone in the world? You're you're definitely not alone in that. And yeah it's it's tricky in MySpace too, where there's um you know coaching similar to, you coach similar to entrepreneur, I think comes with a lot of
Imposter Syndrome and Professional Identity
00:32:37
Speaker
baggage, right? it's It can be a really superficial you know Instagram influencer kind of a thing that's kind of dumb and kind of not grounded in anything and kind of scammy and has has some really bad connotations, I think, some of the time. Some of the people who are entrepreneurs, quote unquote, but aren't really entrepreneurs.
00:33:00
Speaker
There's a lot of people who are like coaches, quote but aren't really coaches. And um You know, consultant less so, but that's more of, you know, that that carries some seriousness and heft and has, you know, a kind of tactical element to it that I think is there. But I think some coaches run away from actually calling ourselves that. And, you know, I think it's it's kind of a reclaiming that term for people who treat it seriously as a profession and have invest their training and development and ethics and all of the stuff around it. And yeah, it really resonates a lot with me in that sense too of what we call what we do and what is the reputation that. then what an honest appraisal of what
00:33:48
Speaker
you know what is what is an honest appraisal of what it is Yeah. One, i'm glad I'm glad to hear I'm not alone. ah But two, I'm sure this is some form of imposter syndrome or something along those lines, which I know I've heard before.
00:34:04
Speaker
just it' always felt different than imposter syndrome. To me, it just felt like a like a weird shame in what I did. um And I mean, I like...
00:34:16
Speaker
ah The people I respect in in my life and that i look up to, none of them are designers. None of them are programmers or business owners. They're mostly scientists and artists.
00:34:28
Speaker
and So I think there's an element of that as well, where... I just, I'm almost embarrassed um sometimes. But anyway, we don't have to go down this track.
00:34:40
Speaker
um it's but It's funny looking you know from the outside in though. It's um you know it's it's funny what what different people categorize as successful. And yeah, it's it's it's a tricky thing. It's like, you know what the what's traditional success look like? What does...
00:34:57
Speaker
what you do look like and um kind of what does you what does what you look up to look like? And it's some really deep stuff. Yeah. But on a day to day, I wear, I definitely wear a lot of hats.
00:35:10
Speaker
Uh, I'm certain some, some days I'm holding a bag and I'm trying to close a deal. Some days I'm putting together ah marketing plan, writing copy. Some days I'm designing a product. Some days I'm building a product and there was my the only, uh, what, like the only advice I've ever really gotten in my career on this was, it's amazing coworker of mine, ah read this article or there's this concept of giving away your Legos.
00:35:45
Speaker
And i think the article still out there, but it was, it really hit home as a founder where you should you get really used to not finding your groove.
00:35:58
Speaker
And odds are the second you've found a groove is the second you need to step out of it and put someone else in it. And so this concept of sort of giving away your your Legos, I think is...
00:36:10
Speaker
really apt in that as a founder, you should be jumping into the places that are the biggest unknowns where where your team lacks maybe direct expertise and trying to understand if it's something your team can solve.
Adapting and Filling Gaps
00:36:25
Speaker
or if you need to go out and get help. like That's really what you're going to end up doing a lot as a founder. Once you get past sort of the early stages where everyone's literally doing everything, you're going to have to start specializing and avoid of having someone who's been there before.
00:36:42
Speaker
You're going to have to figure some of that stuff out yourself. So early days in density, i was flying around the country with a sensor that was the size of a freaking ah like personal pan pizza from pizza um and trying to convince them to buy it from us. ah So, you know, I was a salesperson responsible for marketing, even though we didn't have a product.
00:37:07
Speaker
Um, But certainly play that sales role and build some of the early foundations for for a sales motion that eventually ah we had a senior salesperson come in and take over, which was totally the right thing to do for the business.
00:37:25
Speaker
But that definitely leads me, a designer, a programmer who just spent the last couple of months learning how to be a sales operator, not just a sales person, but how do you build a sales org ah with with seemingly nothing to do?
00:37:42
Speaker
um So I think getting used to jumping into the unknown is just something as a founder you have to love. You have to really, really love not doing the thing that you love doing basically.
00:37:56
Speaker
Um, and find a new passion for finding gaps, identifying who the best person to fill that gap is. If it's not you, um, and, ah growing your business is, is really what I've now learned to love and what I love most.
00:38:17
Speaker
So early on it was, what can I build? ah and how do I make it the best thing in the world? Now it's mostly about people, finding gaps and then finding the right people to fill them.
00:38:28
Speaker
you You articulated something that I think a lot of leaders face in general, the founders, but also leaders in organizations, managers, even kind of you know the chief of staff kind of operational fixer level of a lot of times it gets it's something where there's you you don't get to be exceptionally good at any one thing. Your skillset becomes that finding and filling.
00:38:58
Speaker
the gaps and working through people to achieve goals. And it's, it can be really, I think, challenging for a lot of people, but particularly people I've worked with where they're, you know, there's there's not a clear metric for success in each of these different areas and you're going to be bad at a lot of them, but you're going to be good enough at a lot of them to figure out what's going on. And like ah really clicking into that being your primary job and that being what you should be measuring your success against is, is key. And i think you said that so well.
00:39:29
Speaker
Yeah. How do you, how do you feel about this whole founder mode thing? it's It's an interesting one. I kind of mixed thoughts on it. like i i like i I like the crux of the concept and I think it was articulated in a condescending way, if that makes sense.
00:39:47
Speaker
Okay. i i I appreciate that take. I think that's actually accurate. i think What do you think? I had a negative reaction because I think it comes off as founders are...
00:40:00
Speaker
the most capable people and they're what makes a business successful. And I just don't buy that at all. I think, uh, you know, no very few, i I know of zero hyper successful businesses that comprise of one founder.
00:40:18
Speaker
Um, They're usually a team. And I think a founder's superpower generally is what we're talking about. um You have this irrational attachment to your business. So you're willing to do everything.
00:40:32
Speaker
You're not thinking about career, not thinking about anything other than your business. So you will simply do things that other people won't. because your incentives are aligned. You also tend to have the most to gain from a positive outcome for the business.
00:40:47
Speaker
And you're usually at the least, you're at zero risk of being fired for taking a risk. So I don't like the rhetoric because I think if you gave employees the same amount of equity and the same amount of freedom and incentive, I think you would probably start to have similar outcomes.
00:41:06
Speaker
Um, So I do think founders and VCs need to be checked on on that. um And it came off as like, you know, employees are not going to be the answer or are not going to be able to elevate your product or solve critical problems. I think if you incentivize people to do good work, they can totally help you do that.
00:41:28
Speaker
Yeah, this this whole like think like an owner kind of a thing is frustrating for people when it's, you know, yeah, but you're not you're not retaining the earnings as an employee, right? Think like an owner, but you're not one. Think like an owner, but yeah, but we'll pay you a paycheck and anything you make above that I get to keep is kind of a, you know, it's a tricky thing. It's, you know, the whole work being a family thing is also...
00:41:51
Speaker
yeah off-putting in a lot of I don't buy it. People, look, I love the people i work with and I care about them very much. And I think we build teams that have an element of that, but don't, I don't get it twisted. Like I don't expect them to work the way I work because I'm not, I'm not giving them enough money to do that period.
00:42:17
Speaker
Um, and it's an unfair ask otherwise to be like insanely passionate about something, ah especially at an early stage where compensation is not aligned with your personal investment.
00:42:29
Speaker
So, ah you know, this can, this can easily digress into how to properly compensate people and all that. But if you're an employee out there, you know, be excited about what you're doing, but be realistic and make sure you're getting paid.
00:42:44
Speaker
for extra effort. And if you're a founder, ah treat people with respect. And if you want them to go the extra mile, pay them for the extra mile. that's I'll leave it at that. I think that i think that's that's so well said. And you know i think i think even the the compensation I think is key. And I also think clear swim lanes for what people are, but like as as a founder, as and as an owner, as a um senior leader, as an executive,
00:43:15
Speaker
giving people clear runway on what they're allowed to do without red tape and without bureaucracy is the part of the founder mode thing that I actually liked is like, you know,
00:43:30
Speaker
helping people understand where they can make decisions that don't have to check, you know, 75 organizational boxes to make a pretty obvious decision that lets them kind of adapt and and go in it. But that requires leadership buy-in and leadership cover to let people do that, to your point. And i think that's that's a big part of it. So I i guess where we're kind of...
00:43:56
Speaker
Aligning on this in a lot of ways is like, yeah, if you want to do this, then put your money where your mouth is and, you know, have people's backs when when they work within these parameters, too. In terms of organizational culture, how do you think about creating and sustaining culture and in your
Building a Supportive Company Culture
00:44:14
Speaker
organization? Yeah.
00:44:15
Speaker
One, actually having and understanding what the culture is you want to build is important, but ultimately not required. um But you need champions of it.
00:44:28
Speaker
So that's another reason why having five founders is a superpower, because you have people who are embodying the kind of mentality and approach that you want to have to work every single day, managing people involved in projects.
00:44:46
Speaker
Early on for the first 20 to 50 employees, it's rare. One of those employees isn't interacting with a founder at least once a week.
00:44:57
Speaker
So that was amazing to have. um So it wasn't as hard until really around that 50 mark when all of a sudden we're hiring people.
00:45:09
Speaker
And then until the day I left, I never met that person. um In which case you need, you do need to document what it is you're trying to do. ah For, for bread, there are two super important things.
00:45:23
Speaker
I would say three super important things. One curiosity. curiosity I think this needs to be demonstrated through action, but you need to find people who are curious.
00:45:39
Speaker
And curiosity typically leads to unpredictable things, but is such an important thing if you want to have an environment that's playful, that is open, and that's not so sort of regimented.
00:45:56
Speaker
If you want a fluid a fluid work environment, one that can pivot, you need curious people. ah The other is just kindness. And kindness is not to be confused with um like being soft or being... Pushover kind of a thing.
00:46:15
Speaker
Yeah. Kindness is just saying... is b is saying what what people, what you what you think and feel and and doing it in a way that is not disrespectful.
00:46:28
Speaker
But for us, kindness is like if someone is doing something wrong, it's kind to tell them that they're doing something wrong. that's That's being kind to a person. You're not letting them fumble.
00:46:39
Speaker
You're offering a hand, um which leads to the third thing, which is a say yes culture. And that's probably the most important thing to us at the end of the day.
00:46:52
Speaker
So much advice in this world is learn how to say no, learn how to manage your time. Um, I, I think it's the worst advice in the world for anyone just starting out.
00:47:06
Speaker
Like you're going to get absolutely nowhere if your primary goal is to say no to things. Um, I would not have met my founders. I would not have started Density.
00:47:18
Speaker
i Genuinely wouldn't I wouldn't know how to program. I wouldn't even be a designer like I Found these things because I said yes My founders are similar and that's ultimately if someone asks for help the answer is yes if someone asks for anything the answer is yes um And then we figure out how but the if people need help the answer should be yes um Let's figure out how to help you not yes help you right away, but Yes. How, how can we help? So anyway, those are like three, and know that's very kind of preachy and, but I've been saying these things for years. So I, I just know what I care about.
00:47:58
Speaker
Um, but, uh, yeah, anyway, sorry. I'm sorry. I could ramble. No, this is great. There's ah there's a real clarity around around the cultural pillars. And it sounds like these are deeply felt and deeply enacted by you and your co-founders, which I think is the the key thing on culture when it's not just something that... the I think the worst thing... It's almost worse to have cultural values that are not enacted than to have no cultural values at all because people people can smell that hypocrisy. Yeah, totally. Yeah.
00:48:30
Speaker
So in terms of, it doesn't necessarily have to be books, but books or any other resources of any kind that have been influential on you as a leader? would love to hear about any of those.
00:48:43
Speaker
Yeah, as a leader. um So one that always comes to mind is a book called Design as a Job. And i don't know if there are great leadership examples in it, but I do think it formed a perspective in me that the idea of a job and work and how to set up some kind of baseline understanding that we live in this weird capitalistic world. And like, this is a job and it's a job to a lot of people. It should, you should treat it as a job.
00:49:21
Speaker
Uh, it's not ah your playground. So, Hmm. that That was a book that I think was impactful in that sense. And Dave Montero is the author and he's super crass and very matter of fact. And that really resonated with me at the time.
00:49:36
Speaker
So I always recommend that even to people who aren't designers, I think maybe especially. It's a great book. Yeah. What makes you say that for people who aren't designers? Oh, one, I think design is a, is a misunderstood discipline.
00:49:49
Speaker
So I think people reading that will just gain some insight into how designers actually think about their job and also how you can use design more effectively, more than to just make something look good, but to run a better business.
00:50:02
Speaker
So that's primarily the reason, but also just for that, I think design is a great thing to understand because ultimately, it's open about being a craft.
00:50:14
Speaker
It's open about refinement and there's sort of this, it's all about improvement. Design is the, its sole purpose for existence is improving things.
00:50:28
Speaker
And so I think the more exposure anyone has to design the design discipline there's there's just so much to borrow from. like It's a great recommendation and one I'll definitely be checking out. And it it sounds like that is universally applicable to anyone who is interested in k craft and totally improving things in any way. That's that's great.
00:50:48
Speaker
I think the the best book though, probably most impactful is a book called, I might butcher it. It's called River of Consciousness, I think. It's by Oliver Sacks. And I don't think you have to read that one.
00:51:02
Speaker
You probably could just read anything by Oliver Sacks. but I think I gained a new appreciation for what empathy meant. And i think being a leader, being a good leader is mostly about empathy.
00:51:22
Speaker
ah Sometimes maybe the lack of it, but I think often the the the more you're able to understand how you yourself are perceived.
00:51:37
Speaker
And the more you're able to see the world through the eyes of people who are looking up to you, I think the more intentional you can be about your leadership decisions.
00:51:48
Speaker
And in that same vein, like being a leader should be a job. It's not something to just play with. It's a privilege and thinking about it like a craft.
00:52:00
Speaker
um is important. And I think one of the most important tools you have as a leader is empathy. And Oliver Sacks is, um I think a hallmark person or like the embodiment of empathy.
00:52:16
Speaker
And I always get sad thinking about him because he's, he he died not not too long ago, although a while now. um But yeah, he's amazing. And I would recommend that book. It's fun, funny, insightful, but yeah kind of maybe I don't have like how to be a leader 101 kind of books, if that's what you're looking for.
00:52:37
Speaker
No, that's not at all what I'm looking for. That's exactly it. And that's what I found with a lot of guests are these lateral books that have lessons on leadership in a beautiful way, like you just said about empathy being core to leadership or...
00:52:52
Speaker
much more valuable than the seven habits. And think that's a, it's it's a real thing. And I like hearing what kind of stuff actually inspires people. Cause I think leadership is a fundamentally human discipline and it's not, it's not going to be a um check the box and it's not going to be you know, something that's it's just so easy to do and you just follow the system and you're done. it's It's a really deeply human relational way of being. And I think you're so right. It's a it's a job to take seriously. It's a craft to take seriously and it impacts real people's livelihoods and lives. And I think it's really important.
00:53:34
Speaker
Yeah. Yeah. Um, isn't everything that really like it all comes down to relationships, I think at the end of the day. So true. Yeah. So true.
00:53:47
Speaker
Yeah. Yeah. No, it's beautifully said.
Future Business Philosophies
00:53:50
Speaker
So in terms of bread, what are you most excited about in terms of the future of the company and any of the ventures you're supporting?
00:53:59
Speaker
Yeah, I think, uh, One, a lot of the things we've talked about today, it's been kind of interesting to go through all these things, but I do have opinions on on how to build a business and what a good business is.
00:54:15
Speaker
and I think I'm just really excited about exercising that in ah really direct way. so to date, it's always been helping people tactically, but I think actually giving them the means to do it themselves is just genuinely exciting to me.
00:54:31
Speaker
I think one thing we haven't really touched on too is just the kinds of businesses that I care about and get excited about businesses like density that the average consumer doesn't necessarily think about every day, but are really foundational to our world.
00:54:47
Speaker
Ultimately density operating in a commercial real estate space where 40% of the space in this country is empty. all day, every day.
00:54:58
Speaker
That's an unfathomable, unfathomable amount of space. That's just wasted. Yet here we are with housing crises.
00:55:09
Speaker
Here we are with ah overcrowded neighborhoods and cities and new buildings going up every day. ah But yet there's space that's just waiting for people.
00:55:22
Speaker
So I love those kinds of problems. My founders love those kinds of problems. And it's going to be exciting to be part of ah more than one, right? At any point in time, if we were building a solution directly, we just get to work on that one thing. Whereas if you're on the capital side of things, you can you can have your hands in a couple different ah problems at a time. So I think that's really what I'm excited about is employing a lot of the things I've learned over the past eight years um and being able to have a broader impact on things I care about.
00:55:59
Speaker
it's It's really cool to hear. And I just love the way you you think about this kind of stuff and put it into practice. And it's been such a pleasure talking about. How can listeners learn more about bread and follow along with you and your journey?
00:56:10
Speaker
Yeah, I guess the old fashioned way, you can go to our website, madebybread.com. We have some writing on there that speaks to some of what we talked about today. But you can also reach out to me directly.
00:56:23
Speaker
My website is robertgrazioli.com. And i'm I'm always happy to meet new people and talk shop. I really appreciate that. And just ah it a really generous offer. And thanks for going in depth with everything today. I think people will get a lot from this episode and hearing a very different perspective than I think a lot of people might assume from from venture capital space or from the design space in particular. So thanks for illuminating us on that.
00:56:50
Speaker
Yeah, hope so. And it's really been awesome. Thanks, Dan. Awesome. Thanks again, Rob. Appreciate it.
00:56:57
Speaker
Hey, everyone, I hope you got a ton out of that episode. And if you did, if you could please share it with someone who might find it valuable and take a second to leave a quick review on whatever podcast app you're using. Even just the stars is great. It goes a long way in helping others to discover the show.
00:57:10
Speaker
And if you liked this episode, check out our previous episode with John Whitfield on the future of sustainability, success drivers for impactful executives and leadership lessons from the Netherlands. Here's a clip from it. I'm very surprised as I look at job descriptions and job profiles for people who are leading sustainability functions, how rarely I see the term change management or OCM, organizational change management.
00:57:32
Speaker
I feel like that's the skill set that every, I think every leader could is going to be improved by learning good change management, but I think particularly in the sustainability space because you you're driving such dramatic change within an organization.
00:57:46
Speaker
And um you know people have a really intense reaction reaction to change.
00:57:54
Speaker
It's the same cycle. The response to change is the same cycle as the grief cycle. It's a Kubler-Ross change curve. Is that den denial, bargaining, depression, acceptance? It's the same people experience that whether they're grieving the loss of a loved one or they're grieving the loss of an old way of doing things.
00:58:12
Speaker
It's the exact same psychological experience. And so anybody who wants to be an effective leader in the sustainability space or in I would argue in any space is learn as much organizational change management as you can.
00:58:23
Speaker
read John Cotter, connect with the organization ProSci. um When we don't have the OCM frameworks, the human response to change can be so overwhelming, so frustrating, so demoralizing, and leaders are supposed to be driving change agendas.
00:58:38
Speaker
And so the frameworks you can learn from good OCM helps us to realize how humans relate to change and help shepherd them through that with empathy.