Welcome to Said with Candor podcast! In this episode, our host Kelsey Bishop chats with General Partner at Park Rangers Capital Erica Wenger, about the changing landscape of tech funding. Erica highlights the shift towards a new generation of community-centered founders and companies which she coins “elephants” in her recently published article: "Elephants, Not Unicorns". In her perspective, this marks the end of the Age of the Unicorn companies and their business-building focus on product-market fit.
🎧 Listen to Said with Candor on your favorite podcast platforms: YouTube, Spotify, Apple Podcasts, and Google Podcasts. Show your support by liking and subscribing!
"I think people need to get really clear (…) on where they want to work and what they want to build, and what they want to invest in. They want to be building, founding, investing in things that people are forced to use, or do people want to be building, investing and founding things that people actually care about?"
— Erica Wenger, General Partner at Park Rangers Capital
Erica Wenger is an Entrepreneur, Investor, and General Partner at Park Rangers Capital, an early stage venture fund investing in the next great software companies. Erica recently authored the article "Elephants, Not Unicorns", focusing on the rise of community-centered tech companies. Erica hosts the podcast "Dear Twentysomething", featuring interviews with inspiring change-makers, and is a TED speaker on the topic of social entrepreneurship.
🐘 Get to know Erica on Candor: https://www.joincandor.com/users/erica-m-wenger
📖 Read Erica's article “Elephants, Not Unicorns”: https://prc.beehiiv.com/p/elephantsnotunicorns
🎙 Listen to “Dear Twentysomething”: https://open.spotify.com/show/0ci6jNzJhYxCi73nQ9FCjk?si=a36d3699f8f3414d&nd=1
📺 Watch Erica’s TEDx Talk “How social entrepreneurship will change the world”: https://www.youtube.com/watch?v=KrQuGTvwl0s
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00:00:26:12 - 00:00:55:07
Kelsey
Hey, everyone, and welcome back to the Candor podcast, where we get candid about culture. Candor helps leaders create strong culture through Candor profiles, which is the best way to share how you work. You can sign up for Candor for free at joincandor.com. I'm Kelsey, the founder of Candor. And today I am so excited to be joined by my good friend Erica Wagner, the general partner at Park Rangers Capital. Park Rangers Capital is an early stage venture fund, investing in the next great software companies.
00:00:55:09 - 00:00:57:02
Kelsey
Welcome, Erica.
00:00:57:04 - 00:01:01:00
Erica
Thanks, Kelsey.
This is so fun. We get to hang on a podcast.
00:01:01:01 - 00:01:05:11
Kelsey
I know amazing. Usually we just hang in. This time it's recorded in real life.
00:01:05:13 - 00:01:08:20
Erica
I know. Yeah. So now we're either a screen that works too.
00:01:08:22 - 00:01:22:07
Kelsey
I love it. So tell us, tell us what you're building at Park Rangers Capital. Tell us. I know you have this amazing thesis about elephants. How relevant? We also love elephants here at Candor. But tell us more about what you're building.
00:01:22:09 - 00:01:45:00
Erica
You know, I just put that together that we both love elephants. Now that you say that, obviously elephants are your thing. I just did not resonate until just now. Yeah. So basically the fund is, like you said, an early stage pre-seed venture fund. We just invest in software, no product, no hardware, although those are also amazing and can be elephant companies.
00:01:45:02 - 00:02:09:03
Erica
And my thesis really stemmed from this idea that the honest truth is like one. I kept throwing around a lot of words that I care deeply about community, organic growth, purpose, building in public. And I felt like it wasn't all coming together in a very cohesive way. And so that led me to basically coin a new terminology for the types of founders and the types of companies I want to back.
00:02:09:05 - 00:02:38:14
Erica
And then I think like more honestly, I have seen a lot of and been part of a lot of companies that were on the path to becoming a unicorn, maybe even, you know, saw us invest in companies previously that were unicorns that didn't last a long time. Some did, some didn't. And I felt that the way we were evaluating companies as a society and as an industry where it was just about a singular subjective valuation, maybe it wasn't the best way.
00:02:38:16 - 00:02:57:00
Erica
And there may be a more holistic way to think about what types of companies will be around for the long haul. And each person and each investor can craft what their domain is and what they think those companies look like. But for me, I felt like I needed to coin a new icon, a new animal, and that's where the elephants came in.
00:02:57:00 - 00:03:19:13
Erica
So the idea is, you know, unicorns are over. It's not just about hitting a subjective valuation, like I said, but really actually what are the other elements that can indicate a company is going to be around for the long haul that indicate they're very healthy, very sustainable, very collaborative. Some of these elements that I look for and that I think are really indicative of like the next great companies.
00:03:19:15 - 00:03:36:10
Erica
And so that's where elephants comes in. So I wrote a piece on this just about kind of the trends leading to this place and and what are the traits that make up elephant companies. So those are the types of founders I'd like to back and it's super fun having people read the essay and engage with the content and tell me about what they're building.
00:03:36:10 - 00:03:44:10
Erica
And it resonates with people in a bunch of different ways. And so it's been really fun to to kind of craft new terminology and see how it lands, you know?
00:03:44:12 - 00:04:18:02
Kelsey
Yeah, I love that. And it's, it's cool because I feel like this framework maybe you didn't mention this, but I feel like this rings true for me. The elephant companies have, whether explicitly or implicitly, a better focus or like a better intention around their company culture. And like you look at a lot of unicorns and I think my experience working in early stage startups in San Francisco and like some of these unicorns was like they could have it all working on the inside of like monetization and having an amazing product.
00:04:18:04 - 00:04:23:00
Kelsey
But if the company culture doesn't work, like you said, they're not going to last long term.
00:04:23:02 - 00:04:47:16
Erica
I think that's so spot on. And the honest truth is when I was writing this, there's three key elephant traits. There was originally a fourth actually, and the fourth was around culture. You know, I think from like an examples standpoint, those internal culture is just so much more private and personal. And to be honest, like the ones that I was thinking of in listing were not publicly available information.
00:04:47:16 - 00:05:07:04
Erica
It was more just like what I had seen from friends and people and places I'd been. So you're 1,000% right. And that was such a consideration. I think when I think about the 11 companies, I think of founders that are also community builders, and often when you are just naturally community builder, it's like being an entrepreneur. It's just like in your bones.
00:05:07:04 - 00:05:27:05
Erica
It's a blessing and a curse. It's just who you are. You really care a lot about building a very thoughtful internal community, a.k.a culture, and that obviously looks so different by company. Obviously, you know, depending on your mission, you're going to want to have a different kind of culture, but I think that's completely spot on. Like you're going to want people to feel like their identities are supported and represented.
00:05:27:10 - 00:05:47:14
Erica
You're going to want people to feel like they are being heard and like they are able to take time off if they want to. And just like deeply connected to what they're solving for at that company, which I think creates a great culture, you know, better than anyone what creates a good, great culture. But I do think those, like thoughtful leaders tend to be community builders and they tend to have that element.
00:05:47:16 - 00:06:10:21
Erica
So, yeah, I think that it's extremely important and it bodes well to from a purpose standpoint. So that's another piece of the often companies I look for really strong mission, really strong purpose, really strong reason for existing. I don't want you to just like build a company because you know you can race for it and execute. There really needs to be like a strong reason behind it and that often really helps with retaining talent.
00:06:10:23 - 00:06:30:13
Erica
And when you have talent that's really tied to what you're doing, you know, you've the opportunity there to create a really incredible culture. You can take advantage of that too, but there is often this like really strong desire amongst your team to be part of something bigger than themselves, be very committed to the mission and I think there's just an opportunity there that the right founders will take advantage of.
00:06:30:15 - 00:06:51:21
Erica
It's a very people centric framework which I really enjoy, like the purpose driven. Like, what are we working for? Is everyone kind of bought into it? And I think that community driven, it's like, who's around the table? Are we engaging them? Do they feel connected? And that's, that's what reminds me of kind of the culture piece being so kind of like interlinked into this framework, which I really love.
00:06:51:23 - 00:07:05:19
Kelsey
I love to hear like, what's one company that you look at and you're like, That is an elephant. Like, tell me what sparks like the, the inspiration around around this particular company. If you have any type of mind.
00:07:05:21 - 00:07:29:04
Erica
Yeah, of course I always have a bunch. So to your first point, you're completely right about the people centric piece. I will just say on that, I think to be an early stage investor, people are crazy if they think it's anything other than people. Yeah, you know, because especially a pre-seed like ideas change, markets change, which we've seen like, yes, bull is everything.
00:07:29:04 - 00:07:52:20
Erica
And I think I that's kind of my approach is like I'm just betting on just the best people who fit these buckets in terms of an elephant company that I'm excited about. So there's one in particular I'm an angel investor in, and it's called Beehive, and it's a really cool, like future of work startup taking over like the Substack newsletter space.
00:07:52:22 - 00:08:18:10
Erica
The way I see it is a really helping solo creators and newsletter writers create financial freedom, and there are few things that are more powerful than making a bunch of money and being able to have control over your time. And what's really cool about what they've done is they just raisonné they've got 90% organic growth. So one of the key pieces that I get excited about in this community, but yeah, one of the early signs of community is like, what's your organic to payout ratio?
00:08:18:10 - 00:08:37:12
Erica
And like, are you just pumping money into this thing and hoping that the metrics make sense, or are you building this organic community of people that are spreading the word for you? I think they've completely destroyed that. There's also this element of like how you speak about the people that are using your product. You know, a lot of companies say customers, they say clients, they say users, they say members.
00:08:37:14 - 00:08:38:20
Erica
And I think that's something.
00:08:38:22 - 00:08:39:23
Erica
I that you look.
00:08:39:23 - 00:09:02:04
Erica
At to write is like, how are you speaking about the people? You can look at a website, you can see just what's the language around the people that are part of this company a.k.a what I like to call community. So besides doing that really well, obviously very clear mission of like future work, helping silo creators and newsletter writers create this incredible amount of passive income.
00:09:02:06 - 00:09:24:23
Erica
I guess maybe not as passive, some of them are passive and then the last piece is building in public. So like Tyler's been really open. The founder about his journey and really transparent, the good stuff and the not-so-good stuff. And I think that's really built a significant amount of trust. And when we talk about this people piece, I think there are so many great software companies these days, You know, technology is very easy to create.
00:09:24:23 - 00:09:47:18
Erica
Like, that's one of the trends I talk a lot about is the beauty of no-code tools, the beauty of AI like the beauty of even content on entrepreneurship. Like it's very easy to start software companies. What's going to separate the winners and the losers? And I think someone like Tyler, who has this strong connection with his communities, building in public, who's building that trust day in, day out, like that's a competitive advantage that I'm going to bet on every day of the week.
00:09:47:18 - 00:10:01:08
Erica
So yeah, I would say Beehive is one that I get really excited about and, you know, very, very small investor. We'll see if the fund gets more involved eventually. But but yeah, but I would say Bee has one.
00:10:01:10 - 00:10:21:08
Kelsey
Yeah, I love that. I'm curious if there's pieces of beehives culture that maybe isn't as public that that you're like I think on this podcast we like to talk about tactics, right? People are like, okay, I'm a manager, I'm a founder. How do I get my culture to be like, bee hive? How do I get my culture to be like remote dot com, like all of these companies?
00:10:21:08 - 00:10:41:07
Erica
I kind of have it figured out. And I think there's a lot of indicators in the outside, things that you mentioned maybe indie growth rates, not always on the outside, but if you're building a building in public, it might be more interesting. But have you noticed any tactics or like interesting things to share from beehives culture that other founders or managers might find interesting?
00:10:41:09 - 00:11:12:14
Erica
Yeah, I think and it's something that they do well that I've seen actually work in a lot of other places is giving your teammates ownership, really letting them feel like they own. So like, you know, their head of growth, like he very much is like I'm growing this business. I own these growth channels and he very much feels like it's not a we he's like, I, I am growing this ionis, you know their head of creators or whatever is like I own who comes on and if it does what it does well, I own it.
00:11:12:16 - 00:11:39:23
Erica
And like extreme ownership is something that I find so interesting. Finding A-plus players and whether they are maybe like entrepreneur is actually on the side or not, and giving them complete control over a part of the business. I think does very, very well because that's how you're able to retain that talent. I think you give them that autonomy, you give them that flexibility, you give them that thing to be proud of and to stand on.
00:11:40:01 - 00:12:02:03
Erica
You give them that freedom from bureaucracy. Right. Which I think is also really important in early stage building is like the people that enjoy it, because a lot of the stuff that I see, quite honestly, is like a 0 to 1. So like I'm not really talking about growth stage up until about early stuff, like the people that enjoy that early building, whether they're a founder, an operator, like they need to move fast, they need to break things.
00:12:02:03 - 00:12:21:02
Erica
Yeah, they need to be like they run stuff. And the more you can eliminate those barriers, the more you can give them pieces of to control, I think the better. So say that's one thing that beehives done really well. But yeah, it's a great point. I think like there needs to be more sharing from the inside and that's what I am hoping to do even more with.
00:12:21:02 - 00:12:34:04
Erica
Like my podcast is more of like, what's going on? There's a company called Simple Modern there. They sell those, you know, those cups like the it's kind of like hydro flask or Stanley. They're like the.
00:12:34:08 - 00:12:35:06
Erica
Oak.
00:12:35:08 - 00:12:52:19
Erica
The insulated cups where I randomly, like love my simple modern right? And we became friends with the founder randomly hopped on a call with him. Such a lovely guy. Obviously he's not building software like there was no context with from an investing standpoint. But we chatted a lot about his culture of simple modern, you know, how he's bootstrap.
00:12:52:19 - 00:12:53:22
Erica
Yeah.
00:12:54:00 - 00:13:08:06
Erica
And now he has kept he has the retention like the employees have stayed for such a long time and how happy they are and how it's this community internally. And I think he's someone where I'm like, Oh my God, he needs to come on the podcast. So we can talk about those tactics.
00:13:08:08 - 00:13:08:23
Kelsey
Yes.
00:13:09:01 - 00:13:27:11
Erica
Yeah, I think like that mindset even of like building a sustainable company bootstrapping, thinking about profitability, that's the same mindset as someone who's going to take care of their employees. That's going to care a lot about keeping people along for the long haul. Like I think it's a that is, as opposed to the folks that are like build at all cost, blip scale.
00:13:27:11 - 00:13:46:09
Erica
Who cares if we lose people along the way? Like just got to, you know, keep growing. It's like it's a very different mindset. I think of one is more of a unicorn mindset of like, fuck it, let's get to a billion. We don't care who we lose along the way. And one's more of an elephant mindset, which is like, we take care of our people, we take care of our business, we want something around for the long haul.
00:13:46:09 - 00:14:00:22
Erica
We want to be like an elephant that lives forever. So yeah, I think it's very much a culture thing and beehives, a software example. But then I think Simple Modern is a good non software example and I hope I can chat with him more about it too because he's awesome.
00:14:01:00 - 00:14:30:12
Kelsey
Yeah, I love that. It, it reminds me that intentionality is a value both when you're like business building and company building like intentionality doesn't just come when you're like, Oh, we're going to take care of our people, but also growth at all costs like that, they don't work together. And so to your point, it's like the people who are really intentional about building along, standing business, working towards profitability, building a product that really works also are intentional with their people strategy.
00:14:30:14 - 00:14:50:22
Kelsey
And yeah, those two things tend to go hand in hand. And so it's always funny to me, like when people were joining Uber like eight years ago, I'm sure their culture has improved now, but I just like to use them as an example where they were, they were blood scaling. They were like the kind of, you know, growth at all costs example.
00:14:51:00 - 00:15:11:12
Kelsey
And you see that in their culture. And so the two things just go hand in hand. It's like it's I don't I can't think of an example where you saw a company blip scale and their culture didn't suffer. I think when you're just kind of flying by the seat of your pants, you can feel that in every, every part of the business.
00:15:11:13 - 00:15:19:08
Erica
Yeah. And I think a lot of that has to do with venture. Like there is this push to raise and build as quickly as possible, to show.
00:15:19:10 - 00:15:19:14
Kelsey
You.
00:15:19:16 - 00:15:44:00
Erica
API, to show all the metrics. But I think we forget that venture is like on a ten year time horizon. Like there is a reason why that's a standard. It's almost like a lot of I feel like what I talk about. It was like getting back to old venture, you know, like reverting back to the yeah, of like you should be investing in things for the long haul, like you're trying to have one outlier that's around forever.
00:15:44:00 - 00:16:04:19
Erica
That's the business model. You know, 99 can fail and one can crush it. I mean, it's not really like that, but that's the idea. And so I think for me, you're you're totally right. Like there it's the business model works. If you take your time and you do it right, the business model does not need to be like, you know, hit 100 million in RR in two less than two years.
00:16:04:19 - 00:16:39:22
Erica
You know, we had a company that did that at my last. And you know what? Power to them. But that's not what they everyone needs to do. The model can still work if you if you raise and you build more thoughtfully, more slowly. And so yeah, I think that that's something that I get excited about. This bear market obviously is not easy at all, but I do think it's helping us think, rethink what venture is really about and like rethink the model and I'm hopeful that more people will be okay with not just building like two or three year funds, but really get back to the like this is supposed to be ten years and
00:16:40:00 - 00:16:42:03
Erica
that's what's going to build the hell these companies.
00:16:42:05 - 00:17:01:15
Kelsey
I could not agree more. I think like that the building for the long term is so much better for everyone involved. And I think there is also this. We were just talking before we started our podcast, we were talking about speed, and I think speed is really important for startups and I don't think that it actually goes against this principle of intentionality.
00:17:01:17 - 00:17:26:12
Kelsey
But I'd love to hear like how you feel that companies can best kind of balance that like intentionality and building a company that is long term while also still building fast because of the realities of the market and needing to raise the next round. And like there are very real realities that kind of force startups to be on an accelerated or more pressure and pressure induced timeline.
00:17:26:13 - 00:17:44:10
Erica
Yeah, I think it's such a great question and I think like speed comes in so many different forms. There's like speed of product execution, there's like speed of raising, there's like speed of hitting certain revenue metrics. Like I think what I've seen, to be quite honest, is like a lot of the elephant companies that I work closely with and that I see are so product obsessive.
00:17:44:10 - 00:18:04:08
Erica
It's ridiculous because they are building stuff for their community and they are they have this like human centered design approach, quite frankly, to a lot of what they do that they're like, Oh my God, our users need this thing. We need to build it now. And so it's actually like they are they are very fast and very speedy and almost like iterating at a different rate because they are so close to their members.
00:18:04:08 - 00:18:26:16
Erica
And there's like this feedback loop is like product feedback loop that I think is actually very different than blip scaling, which is like pump a bunch of money into paid marketing and like, see what sticks. Yes. Versus like be close to the user, hear what they're thinking, iterate quickly and yeah, you're like your product speeds very fast. Maybe you're not generating revenue right away or maybe you're not like, you know, again, getting a bunch of new users all the time.
00:18:26:22 - 00:18:49:01
Erica
But there's this speed in a different way, which is like a speed of understanding. The customer needs a speed of product execution. And definitely like because of that commitment to the purpose and like enthusiasm for the internal culture in the community, all that stuff, there's like this, this commitment from teammates that I think is hard to even articulate, like it's speed in a good way.
00:07:29:04 - 00:07:52:20
Erica
And I think that's kind of my approach. I'm just betting on the best people who fit these buckets in terms of an elephant company that I'm excited about. So there's one in particular I'm an angel investor in, and it's called Beehive, and it's a really cool, like future of work startup taking over the Substack newsletter space.
00:07:52:22 - 00:08:18:10
Erica
The way I see it is really helping solo creators and newsletter writers create financial freedom, and there are a few things that are more powerful than making a bunch of money and being able to have control over your time. And what's really cool about what they've done is they just raised, they've got 90% organic growth. So one of the key pieces that I get excited about in this community, but yeah, one of the early signs of community is like, what's your organic to payout ratio?
00:08:18:10 - 00:08:37:12
Erica
And like, are you just pumping money into this thing and hoping that the metrics make sense, or are you building this organic community of people that are spreading the word for you? I think they've completely destroyed that. There's also this element of like how you speak about the people that are using your product. You know, a lot of companies say customers, they say clients, they say users, they say members.
00:08:37:14 - 00:08:38:20
Erica
And I think that's something.
00:08:38:22 - 00:08:39:23
Erica
I that you look.
00:08:39:23 - 00:09:02:04
Erica
At to write is like, how are you speaking about the people? You can look at a website, you can see just what's the language around the people that are part of this company, aka what I like to call community. So besides doing that really well, obviously, very clear mission of like future work, helping solo creators and newsletter writers create this incredible amount of passive income.
00:09:02:06 - 00:09:24:23
Erica
I guess maybe not as passive, some of them are passive and then the last piece is building in public. So like Tyler's been really open. The founder about his journey and really transparent, the good stuff and the not so good stuff. And I think that's really built a significant amount of trust. And when we talk about this people piece, I think there's so many great software companies these days. You know, technology is very easy to create.
00:09:24:23 - 00:09:47:18
Erica
Like, that's one of the trends I talk a lot about is the beauty of no code tools, the beauty of AI like the beauty of even content on entrepreneurship. Like it's very easy to start software companies. What's going to separate the winners and the losers? And I think someone like Tyler, who has this strong connection with his community, building in public, who's building that trust day in, day out, like that's a competitive advantage that I'm going to bet on every day of the week.
00:09:47:18 - 00:10:01:08
Erica
So yeah, I would say Beehive is one that I get really excited about and, you know, very, very small investor. We'll see if the fund gets more involved eventually. But but yeah, but I would say Beehiive is one.
00:10:01:10 - 00:10:21:08
Kelsey
Yeah, I love that. I'm curious if there's pieces of Beehive's culture that maybe isn't as public that you're like I think on this podcast we like to talk about tactics, right? People are like, okay, I'm a manager, I'm a founder. How do I get my culture to be like Beehive? How do I get my culture to be like Remote, like all of these companies?
00:10:21:08 - 00:10:41:07
Erica
I kind of have it figured out. And I think there's a lot of indicators in the outside, things that you mentioned maybe indie growth rates, not always on the outside, but if you're building a building in public, it might be more interesting. But have you noticed any tactics or like interesting things to share from Beehive's culture that other founders or managers might find interesting?
00:10:41:09 - 00:11:12:14
Erica
Yeah, I think and it's something that they do well that I've seen actually work in a lot of other places is giving your teammates ownership, really letting them feel like they own. So like, you know, their head of growth, like he very much is like I'm growing this business. I own these growth channels and he very much feels like it's not a we he's like, I, I am growing this, I own it. You know their head of creators or whatever is like I own who comes on and if it does what it does well, I own it.
00:11:12:16 - 00:11:39:23
Erica
And like extreme ownership is something that I find so interesting. Finding A-plus players and whether they are maybe like entrepreneurs actually on the side or not, and giving them complete control over a part of the business. I think does very, very well because that's how you're able to retain that talent. I think you give them that autonomy, you give them that flexibility, you give them that thing to be proud of and to stand on.
00:11:40:01 - 00:12:02:03
Erica
You give them that freedom from bureaucracy. Right. Which I think is also really important in early stage building is like the people that enjoy it, because a lot of the stuff that I see, quite honestly, is like a 0 to 1. So like I'm not really talking about growth stage up until about early stuff, like the people that enjoy that early building, whether they're a founder, an operator, like they need to move fast, they need to break things.
00:12:02:03 - 00:12:21:02
Erica
Yeah, they need to be like they run stuff. And the more you can eliminate those barriers, the more you can give them pieces of to control, I think the better. So say that's one thing that Beehive's done really well. But yeah, it's a great point. I think like there needs to be more sharing from the inside and that's what I am hoping to do even more with.
00:12:21:02 - 00:12:34:04
Erica
Like my podcast is more of like, what's going on? There's a company called Simple Modern there. They sell those, you know, those cups like the it's kind of like hydro flask or Stanley. They're like the.
00:12:34:08 - 00:12:35:06
Erica
Oak.
00:12:35:08 - 00:12:52:19
Erica
The insulated cups where I randomly, like love my Simple Modern right? And we became friends with the founder randomly hopped on a call with him. Such a lovely guy. Obviously he's not building software like there was no context with from an investing standpoint. But we chatted a lot about his culture of Simple Modern, you know, how he's bootstrapped.
00:12:52:19 - 00:12:53:22
Erica
Yeah.
00:12:54:00 - 00:13:08:06
Erica
And now he has kept he has the retention like the employees have stayed for such a long time and how happy they are and how it's this community internally. And I think he's someone where I'm like, Oh my God, he needs to come on the podcast. So we can talk about those tactics.
00:13:08:08 - 00:13:08:23
Kelsey
Yes.
00:13:09:01 - 00:13:27:11
Erica
Yeah, I think like that mindset even of like building a sustainable company bootstrapping, thinking about profitability, that's the same mindset as someone who's going to take care of their employees. That's going to care a lot about keeping people along for the long haul. Like I think it's a that is, as opposed to the folks that are like build at all cost, blip scale.
00:13:27:11 - 00:13:46:09
Erica
Who cares if we lose people along the way? Like just got to, you know, keep growing. It's like it's a very different mindset. I think one is more of a unicorn mindset of like, fuck it, let's get to a billion. We don't care who we lose along the way. And one's more of an elephant mindset, which is like, we take care of our people, we take care of our business, we want something around for the long haul.
00:13:46:09 - 00:14:00:22
Erica
We want to be like an elephant that lives forever. So yeah, I think it's very much a culture thing and Beehive's a software example. But then I think Simple Modern is a good non-software example and I hope I can chat with him more about it too because he's awesome.
00:14:01:00 - 00:14:30:12
Kelsey
Yeah, I love that. It, it reminds me that intentionality is a value both when you're like business building and company building like intentionality doesn't just come when you're like, Oh, we're going to take care of our people, but also growth at all costs like that, they don't work together. And so to your point, it's like the people who are really intentional about building a long-standing business, working towards profitability, building a product that really works also are intentional with their people strategy.
00:14:30:14 - 00:14:50:22
Kelsey
And yeah, those two things tend to go hand in hand. And so it's always funny to me, like when people were joining Uber like eight years ago, I'm sure their culture has improved now, but I just like to use them as an example where they were, they were blood scaling. They were like the kind of, you know, growth at all costs example.
00:14:51:00 - 00:15:11:12
Kelsey
And you see that in their culture. And so the two things just go hand in hand. It's like it's I don't I can't think of an example where you saw a company blip scale and their culture didn't suffer. I think when you're just kind of flying by the seat of your pants, you can feel that in every, every part of the business.
00:15:11:13 - 00:15:19:08
Erica
Yeah. And I think a lot of that has to do with venture. Like there is this push to raise and build as quickly as possible, to show.
00:15:19:10 - 00:15:19:14
Kelsey
You.
00:15:19:16 - 00:15:44:00
Erica
API, to show all the metrics. But I think we forget that venture is like on a ten year time horizon. Like there is a reason why that's a standard. It's almost like a lot of I feel like what I talk about. It was like getting back to old venture, you know, like reverting back to the yeah, of like you should be investing in things for the long haul, like you're trying to have one outlier that's around forever.
00:15:44:00 - 00:16:04:19
Erica
That's the business model. You know, 99 can fail and one can crush it. I mean, it's not really like that, but that's the idea. And so I think for me, you're you're totally right. Like there it's the business model works. If you take your time and you do it right, the business model does not need to be like, you know, hit 100 million in RR in two less than two years.
00:16:04:19 - 00:16:39:22
Erica
You know, we had a company that did that at my last. And you know what? Power to them. But that's not what they everyone needs to do. The model can still work if you if you raise and you build more thoughtfully, more slowly. And so yeah, I think that that's something that I get excited about. This bear market obviously is not easy at all, but I do think it's helping us think, rethink what venture is really about and like rethink the model and I'm hopeful that more people will be okay with not just building like two or three year funds, but really get back to the like this is supposed to be ten years and
00:16:40:00 - 00:16:42:03
Erica
that's what's going to build the hell these companies.
00:16:42:05 - 00:17:01:15
Kelsey
I could not agree more. I think like that the building for the long term is so much better for everyone involved. And I think there is also this. We were just talking before we started our podcast, we were talking about speed, and I think speed is really important for startups and I don't think that it actually goes against this principle of intentionality.
00:17:01:17 - 00:17:26:12
Kelsey
But I'd love to hear like how you feel that companies can best kind of balance that like intentionality and building a company that is long term while also still building fast because of the realities of the market and needing to raise the next round. And like there are very real realities that kind of force startups to be on an accelerated or more pressure and pressure induced timeline.
00:17:26:13 - 00:17:44:10
Erica
Yeah, I think it's such a great question and I think like speed comes in so many different forms. There's like speed of product execution, there's like speed of raising, there's like speed of hitting certain revenue metrics. Like I think what I've seen, to be quite honest, is like a lot of the elephant companies that I work closely with and that I see are so product obsessive.
00:17:44:10 - 00:18:04:08
Erica
It's ridiculous because they are building stuff for their community and they have this like human centered design approach, quite frankly, to a lot of what they do that they're like, Oh my God, our users need this thing. We need to build it now. And so it's actually like they are they are very fast and very speedy and almost like iterating at a different rate because they are so close to their members.
00:18:04:08 - 00:18:26:16
Erica
And there's like this feedback loop is like product feedback loop that I think is actually very different than blip scaling, which is like pump a bunch of money into paid marketing and like, see what sticks. Yes. Versus like be close to the user, hear what they're thinking, iterate quickly and yeah, your like your product speeds very fast. Maybe you're not generating revenue right away or maybe you're not like, you know, again, getting a bunch of new users all the time.
00:18:26:22 - 00:18:49:01
Erica
But there's this speed in a different way, which is like a speed of understanding. The customer needs a speed of product execution. And definitely like because of that commitment to the purpose and like enthusiasm for the internal culture in the community, all that stuff, there's like this, this commitment from teammates that I think is hard to even articulate, like it's speed in a good way.
00:18:49:03 - 00:18:49:14
Erica
It's like.
00:18:49:17 - 00:18:50:16
Kelsey
Yeah.
00:18:50:18 - 00:19:11:05EricaThey're just so self-motivated. Like they're just so excited about what they're building as opposed to like being forced to run. So yeah, I think where it organically comes from is different. And then I think the speed is speedy in two different ways. It's just, where are you pushing that speed? But it's very hard to balance, to be clear, and I certainly don't have it figured out.
00:19:11:05 - 00:19:32:04
Erica
And I would say I'm always toggling between like I'm a person where I am like extreme work or extreme play. And like, I can be working super hard and crushing. And then sometimes I'm like, Oh, I'm off and I'm off, and I'm like watching a movie and computer is closed and I'm not thinking about work at all.
00:19:32:06 - 00:19:52:06
Erica
And so sometimes I think I struggle a little bit too with like the, like totally on, totally off. So I think it's just a balance with like the speed intentionality question. Like, I think it's just balancing making sure going in the right direction, but still moving fast and moving fast in the ways that really matter. But yeah, I think it, you know, I certainly don't have all the answers, but that's what I've seen so far.
00:19:52:06 - 00:20:12:14
Kelsey
Yeah, it's interesting to think about it, like the speed of learning, especially at this stage we're talking about, right? This is pre-series, a pre product market fit early stage companies. I think the speed of learning and the speed of product is so important. And if you do that well, that is like super intentional. That's getting close to your customers, that's user research.
00:20:12:16 - 00:20:32:00
Kelsey
And then speed of growth can feel very different, right? Like that is a totally different stage. And I think like these early stage companies that are really focused on kind of like going out and speed of acquiring customers, it can feel a bit disjointed before you have chronic market fit. So yeah, I love that.
00:20:32:01 - 00:20:57:12
Erica
Yeah. I mean, I think I think that's spot on and I think like it takes time to build a community and to build this like organic growth and to really build that trust. I think like that's something that I mean, we all know this in any community where a part of like whether it's like a religious organization or it's a school, your alumni organization, or it's like going to your local cafe and seeing the same faces every week, like community takes time to build.
00:20:57:12 - 00:21:14:14
Erica
It takes trust, it takes consistency. And so I think like that's very different than just like acquiring someone on the spot and they become a paid member within, you know, 10 seconds of seeing something like. So I think you also have to give yourself grace if you're building a company this way and that like it'll have compounding effects down the line.
00:21:14:16 - 00:21:31:05
Erica
But in the beginning it does take time to build this community that is obsessed with your product that feels like they're being really served. And they tell one person and they tell one person, They tell one person, and then eventually it becomes this flywheel. But it's like a very different growth strategy like. And so you have to understand what kind of business you're building in like this.
00:21:31:05 - 00:21:42:03
Erica
It's going to feel different. That beginning is going to feel slower, but it's going to be more intentional and it's going to be better for the long haul. But yeah, I, I agree with you. It's it's different.
00:21:42:05 - 00:22:04:23
Kelsey
Yeah, it is. And nobody I mean, at least nobody told me how hard it is to build a product that people are obsessed with. Like, I think it is different, right? Because I've worked at companies that the business works and customers hate the product, but they have to buy it and at least that Candor, we're like kind of on the opposite spectrum where people have to be obsessed with it for it to work.
00:22:05:03 - 00:22:24:13
Kelsey
And I think that's similar to kind of this the elephant framework that you're looking at. It's like, how do you get to that stage? And it is so much iterating, it is so much talking to users and like that takes that takes time. And the faster you can be within these iteration cycles, I think the closer you get to hopefully a product that people are obsessed with.
00:22:24:15 - 00:22:45:06
Erica
I think that's actually such a brilliant point. You just said. It's like, I think people need to get really clear and I'm seeing this a lot post-COVID on like where they want to work and what they want to build and what they want to invest in. Like, do they want it? It's not as black and white, but like they want to be building, founding, investing in things that people are forced to use.
00:22:45:07 - 00:23:09:02
Erica
And again, obviously, like not all like be to businesses that but just in general like they just like it's more about price, it's more about convenience. It's more about yeah like these other pieces which like don't get me wrong, like can make money and that's great or do people want to be building, investing and finding things that people actually care about, that people feel connected to, that people feel seen by, that people feel like their life would be different without.
00:23:09:04 - 00:23:39:01
Erica
And so I think like for me, you can make money in both ways. It's been proven time and time again, and I would actually argue that the latter makes more money in the long run because that's what venture is really about, not just selling secondaries and calling it a day. But I think it's like I'm seeing this resurgence now too, of a lot of friends of mine, quite honestly, that are like and this next generation, I've done a lot of work on like Gen Z, the young millennials and like what they where they want to work and how they want to work and like they want to feel that fulfillment, that purpose, that meaning.
00:23:39:01 - 00:23:57:05
Erica
The thing that they're building and investing in and contributing to is good for people is going to be around. Yeah, it's like making people feel seen. And I think like that it's almost like a bigger philosophical question I think people need to be asking themselves are starting to is like, what do I want my legacy to be? What do I want to be contributing?
00:23:57:05 - 00:24:18:23
Erica
And that's also why I even did the fund in the first place was like, you know, there's nothing wrong with the former. You can make a lot of money. Again, like I said, I don't think it's as long lasting. I wanted to be part of something. I wanted to be contributing something inspiring people to build in a different way, to start a movement, to think about like company building as what it should be, not what it is.
00:24:18:23 - 00:24:44:17
Erica
And that like, I think that that's what a lot of people should be thinking about more than anything else. To your point about how hard it is to build a product, people are obsessed with, yeah, 1,000% so hard. And that's why 99% of startups fail, which is like the normal stat, not like what we've seen in the past ten years where there's like, you know, from 30 to 1200 unicorns, like most startups supposed to fail because it's extremely hard to do.
00:24:44:19 - 00:25:03:13
Erica
And that is where I think, like speaking to people that have done it and continuing to iterate and continue to inspire and have this group of teammates who are like excited about iterating on the product because you need them to help you is important. But yeah, I mean, there's nothing else to say to that other than like, you're totally right and you know, it's hard.
00:25:03:15 - 00:25:04:05
Erica
It's so.
00:25:04:05 - 00:25:07:12
Kelsey
Hard. That's part of the game. That's the game part of the game.
00:25:07:14 - 00:25:18:04
Erica
But that's that's our like I think we forget the stats like, because we've been in a bull market for so long, like most startups fail because they cannot build something that is product market fit that people are obsessed with.
00:25:18:04 - 00:25:50:19
Kelsey
I really like the point around what the next generation and like what the next generation of work, the next generation of people and professionals and what next generation of work will look like. And I agree with you that it's more purpose driven and people just want to give a shit about what they're doing, like they just want to care and I think you pair that with like all of the stuff going on and I and I truly think that like this stuff that will be replaced is those businesses that nobody cares about that are competing on price, that are like lacking horror, walking away from them.
00:25:50:21 - 00:26:02:19
Kelsey
That's the stuff that will be replaced. What you'll be left with is like companies that that give a shit, right? That are doing something for purpose for people. That'll be the elephants, I hope.
00:26:02:21 - 00:26:20:18
Erica
I hope so too. Yeah. It's it's really fun to look at like larger trends that are happening and see like what the next decade is going to look like. I think that's what's been really fun about this job of Venturi's like, you've really got to think about the next ten years. I mean, it's so crazy because I don't even know what I'm going to do tomorrow, but like you really are supposed to think about like where is the world going?
00:26:20:18 - 00:26:42:23
Erica
And like, what are we to see more of? We see less of it. Yeah, it's been a really interesting element to that. And, you know, time will tell how that's incorporated and where that goes. I mean, I agree with you. Obviously we're we have similar philosophies on that. But I just think like in general, you know, like people get also so scared about this, like word like replacement, like and that gets thrown around a lot.
00:26:42:23 - 00:27:12:10
Erica
Oh, my God, Who's getting replaced? You're going to be out of a job. You'll be unemployed. Hello. And, you know, I think, like more than anything, I always try to tell people like view it more as just like an amazing assistant is an amazing copilot, is an amazing friend that can give you the answers. And so, you know, if you are like a marketing professional and your job is to write copy for emails as an example, like you're not going to no longer be needed, you'll now just have that first draft written for you, which is honestly the biggest headache anyway for anyone who's already done email marketing in any way.
00:27:12:10 - 00:27:33:16
Erica
So, you know, I try to tell people to that it is like more of an exciting thing. It'll bring out the companies with heart. It'll really help. So kind of have more of a positive spin on it, but, but yeah, it'll be interesting to see what you know, where it's adopted and yeah how it how it changes companies or I mean in some ways but it's cool.
00:27:33:16 - 00:27:46:14
Erica
It's going to be very exciting and it is exciting so far. How do you think about AI when it comes to culture specifically? Like because I think that's the thing that I. What do you think? How is that part of the candor conversations?
00:27:46:16 - 00:28:15:11
Kelsey
Yeah, I think it's interesting because I think the power of AI is really like mashing together a lot of data and a lot of opinions. And so I think one thing that happens at big companies is you lose track of like the core or like the heart of the company because you have so many voices in the room or like even worse, you go to the executive team because it's like a more manageable way to get everybody's input on like, what are our values, what do we care about, how does work get done here?
00:28:15:12 - 00:28:38:12
Kelsey
And I do think that there is a place for AI and like understanding how are people feeling? Like how do things get done here? What are our values? I get really excited by thinking about like actually developing team values for like a 10,000 person company using AI, right? Where everyone can contribute, everyone can coauthor things, and that's just like not quite possible in in today's world.
00:28:38:14 - 00:29:00:08
Kelsey
I also do think that there's a lot of room for AI to help with, like the micro culture moments. So like, can you be a better teammate with AI suggesting you certain things based on someone's preferences or based on what they know about the person? Can you give better feedback? Could you be a better manager? Could you be a better coach?
00:29:00:10 - 00:29:05:22
Kelsey
I think that there's a lot of room for AI to kind of like step in in these small moments, which I think would be really powerful.
00:29:06:00 - 00:29:23:22
Erica
I love that. I think your point is really is that first point about like consolidating the information from gigantic companies and building like, you know, these are the talk, these are the top ten things that people want to learn more about, or these are the top ten values that they think your culture is. Is this like consolidation of data piece is really interesting.
00:29:24:00 - 00:29:47:23
Erica
I also I don't know if you guys have thought about this, but one thing I feel like we are just struggling with as a society and TBD, how it gets solved is transparency around what internal cultures really look like. And this is one thing that you had asked me about Beehive, and I only know this because like I know some people that work there, but and why it's hard for me, even as an investor to always like gut check.
00:29:47:23 - 00:30:12:05
Erica
This stuff. I have to just do a lot of back channeling. There's no like way for me to see other than like a Glassdoor of like. But most startups are not on Glassdoor, obviously, and that's who, you know, you can argue whether or not that stuff is super factual. There's something really interesting too, about like looking at like retention of employees, looking at like engagement on candor with employees and how successful or not successful companies become and producing like reports on that.
00:30:12:10 - 00:30:44:04
Erica
And obviously it's so much data that like, I can really help with that. But one thing I get excited about too, is like the potential that you guys are collecting, like all of this information from companies big and small, from employees with senior titles and very junior titles about company culture, how connected they feel, how much they want to improve it, and then tracking that against like company performance I think is like really interesting because my like the argument that I always make is like, you know, a better culture equals a better company performing and like, you know, hearing from people all across the hierarchy equals a better company performing.
00:30:44:04 - 00:25:03:13
Erica
And it'd be really cool to see, like with the data you have eventually, eventually what that looks like. I think you guys are in a really special position, like your wedge to really to do that well.
00:30:44:19 - 00:31:29:03
Kelsey
So yeah, yeah, absolutely. Yeah. And I think, I think the other piece of that is humans are really complex and like 10,000 humans making up a culture, it gets really, really complex. And so could you use data to like just make sense of what's going on and so on, like a micro-level, it's could you use data to pair someone and all their complexity and all of their work preferences to a company based on what their culture is actually like and on the macro level, like actually making sense of what's going on in a company's culture, like you said.
00:31:29:05 - 00:31:33:18
Kelsey
So yeah, I, I bet that candor will be the one to do it. But we will see.
00:31:33:18 - 00:31:47:14
Erica
Yeah, me too. Me too. And then when I could do is when I have all these people come to me saying they want to work for an elephant company. And I'm like, okay, I need to build a job or I need to help you guys find this. I you speak this kidding. Here's can they can match you with one of the great companies.
00:31:47:16 - 00:32:10:03
Kelsey
Exactly. Here all my company is here. All their cultures and kingdoms. Makes making sense of them. Yeah, exactly. Exactly. I really appreciate you joining us today, Erica. I have loved our conversation about all things, purpose and the future of work and the future of companies. And I yeah, like, like we said, we shall see. And everyone, thanks for listening.
00:32:10:03 - 00:32:17:19
Kelsey
If you are interested in creating a better culture at your company, you can sign up for candor at joincandor.com. Until next time. Thanks, Erica.
00:32:17:21 - 00:32:18:15
Erica
Thanks, Kelsey.
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