Claire Lew: Transforming Managers into Leaders
Claire Lew, CEO of Know Your Team (one of our favorite products) discusses how they aim to educate, inspire and empower managers to become better leaders.
- How Know Your Team’s resources for remote managers were recently beefed up
- Remote work can bring out the worst in managers
- The secret to knowing when your employees are working
- Know Your Team origin story
- Early iterations of Know Your Company
- Changing the business, changing the name
- The holy grail of problems: having an audience without a product
- The three biggest skills of successful leaders
- Full support for managers: tools, community and knowledge center
- The Know Your Team Methodology
- Going smaller to go bigger
- Know Your Team’s pricing structure
- What is the one thing you wished you’d learned earlier as a leader?
- Big things coming in the Know Your Team pipeline
- Know Your Team
- Know Your Team’s Guide to Managing Remote Teams
- Don’t Let Remote Leadership Bring out the Worst in You
- Workshop Live! Online Leadership Workshops
- The Heartbeat Podcast
IVAN STEGIC: Hey everyone! You’re listening to The TEN7 Podcast, where we get together every fortnight, and sometimes more often, to talk about technology, business and the humans in it. I’m your host Ivan Stegic. My guest today is Claire Lew, the CEO of Know Your Team, and her mission is to help people become happier at work. Now, I’ve been a big fan of Know Your Team, and Know Your Company before it, since we started using the service back in 2017 when we became fully distributed. At the time I was looking for ways to nurture the culture that we had already established as a team and make sure that we could bring those into being a distributed team. And I found Know Your Company through some colleagues of mine, and after giving it a shot, I was so happy and impressed that we’ve been using it ever since. So, I’m so glad to be talking to Claire today. Welcome to the podcast. It’s great to have you on.
CLAIRE LEW: Thank you so much for having me, Ivan. I love that intro, [laughing] because I think it’s always incredible to connect and get to know folks who are using the product for a while. You’ve been with us for a while. That’s awesome.
IVAN: Yeah, we have. I’m kind of sad we didn’t start using it sooner, actually.
CLAIRE: [laughing] I’ll take that. That’s music to my ears, right, as a business owner. So, thank you.
IVAN: Absolutely. How are you? I want to start by saying, how are you doing? How is this pandemonium of a pandemic treating you?
CLAIRE: Well, I think the word that comes to mind is grateful. There are so many people right now who are honestly really struggling. A lot of customers of ours are really struggling, and I think to be in a situation as I’m personally in, which is safe and healthy, the family is safe and healthy, business is strong, employed, right. I just feel really, really grateful and just feel for a lot of folks who are hurting during this time.
IVAN: Yeah, I know what you mean. I kind of feel the same, just grateful being in a position that I am and having a healthy family, and having a company that’s still running and working, and not having to lay anyone off. It makes me think about, like, what could we do to give back to society. We can’t manufacture ventilators, we’re not a Tesla or a GE. We’ve done small things, like a podcast with remote working tips. You’ve kind of gone a little further. You released this guide to managing remote teams for free.
CLAIRE: Yeah, totally. I think in light of folks who, unlike you, didn’t go remote, sort of, or maybe years ago, but just were sort of forced into this and forced into making this transition rather quickly. As a remote team ourselves, and for you as a remote leader too, Ivan, I’m sure you can empathize with the fact that the transition actually takes a while if you haven’t done it before, and probably likely for you and I it was over the course of months that we helped our team transition and it was a sort of big initiative, right?
And now in this situation, you’ve got hundreds of thousands, if not millions of companies and teams that are doing this and having to do it in a matter of days and or 24 hours. And so, we felt like we actually had some really helpful resources to support folks during that time and during that transition. And so, actually what we did is, last year, about a year and a half ago, I spent maybe three to five months researching and writing a guide to managing remote teams. And pulled together a bunch of seminal research from the past 10-15 years, did a big survey with hundreds and hundreds of managers and employees on remote work and best practices, put it together in this 60-page guide. And we put it in the Know Your Team product, along with eight other guides on things like building trust, getting feedback. And we did that, and it’s been sitting there in the product and customers like yourself have been enjoying it and finding it useful.
But when this pandemic happened, I was like, Oh my God, we have so much wealth of information and I’m getting so many questions about what people should do in transitioning, let’s just open this up. So, we made the guide completely for free. And if you actually go and you visit the guide today, what you see is actually almost identical to the way that it’s even formatted in the software itself. And so, in the beginning, we asked for people’s email addresses just to email it to them, because literally we just tried to make it public [laughing] as soon as possible.
IVAN: As soon as possible, yeah.
CLAIRE: Right, and then realized, Oh no, we would love to not even have to ask for people’s emails and for them to just be able to read it in the browser. That’s a much bigger project, and so finally we were able to do that. So, if you go to knowyourteam.com and you go to our remote resources we have a remote manger’s page you can visit that and read that. And, in addition to that, we also hold these Workshop Live! sessions, which I think you may have attended.
IVAN: Yes, I have.
CLAIRE: Oh, yeah, for one or two.
CLAIRE: Oh awesome. Yeah, so these are 60-minute sessions that I personally run on a specific topic on leadership, and we go really deep on it. We were planning to do one on remote work, and so I decided to do one, except for this time, open it up completely for free for the recording, for the slides, everything. And usually that stuff we reserve for customers because they’re, you know, paying us for that. But in this situation, we were just like, No we just gotta get this information to as many folks as possible. So, we had hundreds and hundreds and thousands of people download the guide, and we had over 500 people from all over the world tune in for the webinar.
IVAN: That’s awesome.
CLAIRE: And thousands of folks who actually registered for it. To your point, What are the small things we can do? That was one of the small things that we were able to put forward.
IVAN: I think that’s wonderful. I think that contribution is well-noted, and it’s not just that it’s timely right now, when there’s a pandemic going on, but it’s going to be around for a little while longer here, and I think the whole fundamental way we’re working as a society has been moving towards more of a distributed nature, more of a work from home. And I think if you could think of just one good thing that’s come out of the pandemic it’s that we’ve been challenged as a society to think about how we actually work, and whether location is important to every job. In some cases, it is, of course, but I like that we’re moving to this hybrid and work-from-home culture, all over.
CLAIRE: Yeah, I think it’s encouraging that it’s something that’s more widely adopted just because of the forcing function. I think one of the things that will be interesting, or that I’ve sort of watched, is also the way leadership styles and management styles sort of adapt in that context as well. For example, one of the biggest reactions that often happens unfortunately in teams that go remote quite quickly is that oftentimes the leader, because they’re not used to remote work, they get a little anxious about, Well, are people working? And so, as a result, Ivan, they start micromanaging a bit more. They hold update meetings every day, or they ping people on Slack, What’s going on with this, incessantly. They put up more pressure. There was an article in Bloomberg that was published recently about how it reported bosses panic buying spy software. And this is on tracking and surveillance, right?
CLAIRE: Right. So, I think the opportunity for remote work to actually work well is there. And then I think the actual practice of it. I mean, that’s where we really feel with Know Your Team, and it’s a huge part of why we have the tool and all of our resources is to help make sure that just because you’re now remote doesn’t mean that your actual management practices get better in any way. Sometimes in some cases remote work can actually bring out the worst in us, in leaders, and exacerbate negative habits that we have.
I wrote an article on this recently where I go a lot deeper on that, but it’s just something that I’ve been noticing. I think for folks that are listening, if you are a manager who’s recently become remote and you’re listening to me and you’re like, Well Claire, how do you know if people are working? You know, that’s what I’m trying to figure out, right?
CLAIRE: Ooh, say that one more time Ivan. What was that?
IVAN: It’s trust. [laughing]
CLAIRE: Yeah, right. Exactly. You hire people to do a job, and I think part of your role as a leader is to trust them to do it.
IVAN: Exactly. We’re all adults, right?
CLAIRE: Right. And you have to help them along the way I’m sure at times, and coach folks and make expectations clear, and there’s a lot of things that you could do to create an environment for people to do the work. But there’s a lot of research that’s been shown the more surveillance and tracking that you try to do, the worse that that actual outcome is.
IVAN: And we’ll link to the article for our listeners in the show notes for the website, on the webpage. So, we’ll do that.
CLAIRE: Oh, excellent. Cool.
IVAN: I want to go to the origin story of Know Your Team. I mentioned in the intro that it was previously called Know Your Company, and I want to set up how you were introduced to the product, to the company and why you went that way. Now, my understanding is you hated your previous job.
CLAIRE: [laughing] Yeah, oh man. Yeah. Rewind, if we have a little time machine here, 10 years back I would say, or so. I started a company coming out of college, and it was a beginner coding software school in Chicago. It was actually the first of its kind there. I mean, you see coding camps everywhere these days, though at the time we were the very first ones, one of the first in the country, in fact. And it did really well. But after I helped start the company I wasn’t really sure what I wanted to do, so I took some time off and then I went and decided, You know what, I’m like 22 or 23 years old and I’ve never worked for anybody. Maybe I should go do that first. So, I did.
So, I went to go work for someone, and I worked at a small ecommerce startup. I was an employee and did everything from operations to marketing to sales, and I had a boss, right. And my boss was a terrible leader. He was a great person, a really wonderful human, but a really really terrible leader. Some of the biggest things were playing favorites, lack of vision, sort of being mercurial about different ideas, and no context as to where we were going or why. All good intentions, he was a good person, but it struck me Ivan, Wow, here’s a person who likely thinks he’s a good leader. He’s charismatic, but he’s actually the practice of leadership itself. So, building trust, communicating honestly, creating context isn’t being fulfilled, and it drove me mad.
I was deeply unhappy at my job because of this. I loved my coworkers, loved the work itself, but it was the boss’ influence that really actually hurt my own personal morale and I thought, Wow, if this is happening to me literally, at a six-person startup, can you imagine at a 60-person company? At a 600-person company? And, can you imagine the fact that even in such a small organization, this leader in question also likely has no idea. Right?
CLAIRE: You know if he knew he was bad, he likely would’ve tried to do something a little different.
IVAN: Something about it, right. Would’ve tried to improve himself.
CLAIRE: And so, it just begged this question of how do you help leaders really get to know their team better, right? How do you help leaders become better? And so I decided to really dedicate my life’s work to that. So I spent the next several years immersing myself in self-study and research and then ended up starting my own consulting practice working with CEOs in organizations one on one, and my first actual official consulting client—in terms of helping leaders get to know their team better and see their blind spots and become better as leaders—my first client was actually Basecamp, formerly known as 37 Signals.
IVAN: How did you land that? Did you cold call him? [laughing]
CLAIRE: [laughing] Well, so, you may have recalled that I mentioned that I started this coding school coming out of college.
IVAN: College, yeah. What was it called so we have a link to that?
CLAIRE: It was called The Starter League, and it was unique in the sense that we were one of the first right, if not the first, at least definitely in Chicago. We taught Ruby on Rails. And the other part that we taught is, we taught the ability to actually build your own product, right? So, it wasn’t just this idea of Oh, becoming a code monkey¸ so to speak, right, We’re just going to teach you the things and then you blindly follow. But rather, can we give you the skills to build your own ideas? And that was the whole premise behind the spirit of the organization. Our only year profitable since the first time we opened class, completely bootstrap. We were serving over 1,400 people all over the world who were flying in to take our classes every single week. In person mind you, this is not online, in person.
And, after I left the company actually, Basecamp and the founders of Basecamp and Jason Fried, the CEO, in particular, approached my former cofounders about investing in the company. And so, they actually did a small minority investment. The Starter League is the only company to date that I’m aware of that Basecamp has ever made an investment in. The investment was more than just money, but also just sort of thought partnership and guidance.
IVAN: And mentorship as well.
CLAIRE: Exactly. Right. And so, that’s my connection to Jason. So, at the time, I’d never met him and I’d never been in contact with Basecamp, but now fast-forward back to the point in time where I’ve started my consulting practice. And I got connected to Jason because, my former cofounder, who’s the CEO of The Starter League, his name is Neal Sáles-Griffin, I was telling Neal about my idea, and he just looked at me and he goes, “You need to meet Jason.” And what I didn’t realize is that Jason, just the other day, had been telling Neal all about this problem, and how he wanted to build a product around it. So, crazy timing, crazy serendipity, whatever you want to call it, but that’s how we met. And the rest is history.
IVAN: Yeah. It feels like there were a lot of overlapping factors that really helped you two to get your stars aligned, so to speak. I mean, you’re in Chicago, right? 37 Signals/Basecamp was in Chicago. Ruby on Rails, David [Heinemeier Hansson] is the father of Ruby on Rails, right? So, you got two strikes for you there. And then this interest in The Starter League. So, how wonderful that that would all work out. So, they were actually working on a tool already that they had an idea for, and then what happened then?
CLAIRE: They had already been working on this tool, but when I met them, Jason, he was very much interested in the consulting that I was doing. He said, “I wanna hire you to do a project for Basecamp,” so I did that. He said, “And, I also want to show you this tool that we’re building, and I want to get your feedback on it.” And that tool was actually, at the time it was called Honcho, but what they ended up calling it was Know Your Company.
So what happened was I did the consulting project for them, it went extremely well, they actually ended up changing a number of things in the company because of it, which was remarkable. Then Basecamp launched this product, Know Your Company, they started selling it publicly, and so getting customers, and it just took off. And it took off to a point where they had customers like Airbnb, 1Password, and Jason was like, “Whoa, whoa, this is not a product, this is actually a business.” And so that happened, and then another thing happened, which, as you might recall, they were still at the time called 37 Signals.
IVAN: Yes, I do recall that.
CLAIRE: So, they had a ton of different products, and they wanted to simplify and go all-in on Basecamp. So, Jason called me up one day, asked to meet, we met up and he said, “We’re planning on doing this thing where we’re going to go all-in on Basecamp. We’re changing the name, we’re going to get rid of the other products.” He said, “But Know Your Company, we’re not really sure what to do with that. I don’t want to shut it down. I don’t want to sell it necessarily." What I’d love to do, I have this crazy idea, we’ve never done this before, but we would love to spin it out to be its own separate company, and what if you became the CEO, Claire, and we split equity 50/50? Once you do a million in revenue we’ll bump you up to 75%, we’ll go down to 25% equity, but you run the whole thing. We won’t give you any initial cash, but you’ll get the software and you’ll get the customers. You won’t get any team, so it’ll just be you, so you’ll have to figure out who you want to hire, etc., and that’s it. What do you think? And, this is like six years ago now.
CLAIRE: And I said, “Yeah, [laughing] that’s my dream job. Yeah.”
CLAIRE: Because when I started my consulting practice, I’d done it as a means to obviously help people, but also to really go deep on the problem, if that makes any sense. And then my plan was to somehow transfer into software at some point. And so, yeah, that’s what happened, Ivan. That’s the story.
IVAN: I love to hear origin stories like that. [laughing] It’s so great. One of the things I really appreciate about using the tool, using the software, is that it doesn’t feel like it was a software idea that someone created to solve a problem. It kind of feels like there’s research and methodology and thought and data and evidence to fuel the solutions and to fuel the methodology of mentoring and nourishing and nurturing a culture in your company. And, it’s almost like the software is a side thing. Like it’s a side business. This is the way that you accomplish that. I think, in my opinion, that’s why it’s been as successful as it has. I mean it started off as a very simple tool, right?
CLAIRE: So simple.
IVAN: And I appreciated that as well. It was just email, right? You get an email, you click on a link, you don’t have to log in or anything, you can just put your answer in there. And there’s the whole icebreaker introduction to the tool, and that was so simple back then. I’m guessing that’s what you inherited when you were 50% owner and when you first took over the company.
CLAIRE: Well actually, at the time, even when I inherited the company, icebreakers didn’t even exist actually, that was a feature I ended up designing and coming up and we ended up building, but it was so bare bones, Ivan. It was literally three questions a week. One on Monday, one on Wednesday and one on Friday.
IVAN: I recall. I must’ve been pretty early on then…
CLAIRE: That was it.
IVAN: …because I remember it was like no control over very much anything, right?
CLAIRE: Yeah, it was just you turn it on and off, we give you the questions, you can mix them up and add your own. But the idea, and it was a beautiful concept, which is to make it feel as though you are simply asking questions on a regular basis without any of the overhead of having to figure out, Well, what should I ask this week? That’s usually the hardest part when you’re trying to get feedback. You’re like, Oh, what am I supposed to be asking people right now? So, that was what problem we solved in the beginning.
IVAN: How soon did you realize that the name needed to change?
CLAIRE: That’s a great question. So, the name sort of ended up changing with something that happened a lot later, after we decided actually the business itself needed to change. So, to give your listeners the context, at the time when I took over Know Your Company and started running it, we were called Know Your Company. And our target market at the time were CEOs with maybe 25 to 75 employees, somewhere in there, so you would be sort of [laughing] our target market so to speak, Ivan. And, CEOs in particular who wanted to get honest feedback. Who wanted to know something in their company that they didn’t know before, and they were feeling growing pains and they just wanted to feel closer to their team. That was our target market, right? And that’s what the product was.
So, we did really well doing that. And then we noticed something really interesting, which is, our sales started to be pretty flat, right? Not down necessarily, but just sort of kind of evening out. That started happening, and then another thing started happening, which is we started seeing a lot more competitors than we’d ever seen. When we first entered the scene, the whole idea of getting honest feedback was not super in vogue. And now today it’s just like if you’re not running a poll survey it’s like What are you doing? It’s the thing people do these days to check the box.
So, we started to see the evolution of a market happening, space getting a little more crowded around company feedback. And then a third thing happened that was so, so, fascinating Ivan, which is as you might know, I write a lot on our blog, on our Know Your Team blog. And I decided to start writing a lot more about leadership, especially for new managers, just because we’d been getting a lot of requests about it. And the post did really, really well, so I started writing more. So, everything from How do I run my first team meeting to What do I do in my first one on one to How do I build trust if I’ve just joined to one of the most important things we focus on which is, What would my mindset be as a new manager.
IVAN: How do I fire someone as a new manager?
CLAIRE: Exactly. And these posted crazy well. So, we saw our organic traffic for our blog over the course of the year increase by 21x. It was crazy.
CLAIRE: And it’s just me writing. It’s not like we have a team of people. Just hundreds of thousands of people are reading our blog post. And yet, not seeing a 21x increase in sign-up and sales, [laughing] right? And you’re like, Okay, what is going on?
IVAN: Right. What is the disconnect here?
CLAIRE: And here’s where the problem lied, which was, our audience on our blog were new managers, first-time managers who felt like they didn’t know what they were doing. Our audience for our product were CEOs who were looking to get better feedback. So, what happened is the manager who reads our blog, would come to the Know Your Company site and go, Wait, I don’t own a company. I need more than just getting feedback. I wanted to know how to be a better manager.
Oh, and, and you might remember this Ivan, the product costs a couple thousand dollars to start using. So, the way we priced the product, it was $100 per person, one time, forever.
IVAN: Yeah, we can talk about that later, because I have some questions and thoughts around that as well. [laughing]
CLAIRE: Yes. Love to talk about that. What happened is the way we used to price the product was, it was $100 per person, one time for life. So, if you have 20 people in your company, you pay two grand and you just pay that once and that’s it. The only time you ever pay in is if you hire someone new, and then you pay another $100 and that’s it. So, if you’re a manager and you look at this and you’re like, Wait, I’ve got seven people on my team so you’re telling me I pay $700 up front and then that’s it? That doesn’t really sink in. Right? That doesn’t really fit.
CLAIRE: If you have 10 people you put down a grand? Like, no, that’s just not going to fit in if you’re a first-time manager in your budget.
CLAIRE: So, we looked at this and we realized we kind of have the opposite problem that most startups or companies have, which is, [laughing] the problem most startups have is they have a product, but they don’t have an audience, and we had the inverse, we had an audience, but we didn’t have the product.
IVAN: No product.
CLAIRE: So, we said, Well, let’s change the product. So, what we did is we kept the core parts of Know Your Company, the things that people loved most and made it really successful in the first place. So, like you were saying, there’s questions that were really good, the icebreakers which were awesome, and then we built a ton of other stuff around it that was all part of this methodology that we developed in running Know Your Company for so long. And so we did all this research and pulled together three biggest skills who are successful really did well on were: trust, building trust in a team; honesty, so communicating honestly, getting honest feedback; and context, creating context and helping people know what’s going on. So, trust, honesty and context.
So, what we decided to do was to organize and build out features around each of those: trust, honesty and context. And then we had a hypothesis, that the best way to learn how to build trust and communicate honestly and to create context is not just by turning on a piece of software and going, Okay, everybody, build trust. Go. [laughing] Right. We have rapport.
IVAN: Right. Not gonna do it.
CLAIRE: Yeah, exactly. As well, you actually have to first give someone a foundation of knowledge based off data, based off evidence, and help them along the way. And you have to give some sort of education. You also though, can’t give the education in isolation either though. You can go in and read about trust all day, but if you’re not doing anything that does not make a difference. So, our hypothesis was, Well, could Know Your Team actually integrate the two? Education and the tools. Theory and practice. So, that’s what we built, is, we built a section in the app itself. We call it our Knowledge Center, where it helps gain that foundation of education. That’s why we do the Workshop Live! sessions. That’s why we write 60-page guides on eight+ topics. So, we have that.
We also have a community of people to talk with, right? So, you could learn and see what other folks are doing. But then we also then give you the tool, so you can then turn on the social questions and the heartbeat tools, and you could turn on our one-on-one tool. But you’ll notice, there’s a difference between just using a tool to run one-on-ones versus what you do in Know Your Team is you have a guide about one-on-one meetings, you can read that and then turn on the tool and get so much more out of it.
IVAN: It’s wonderful. I loved watching it evolve over the last few years.
CLAIRE: Oh, thank you.
IVAN: What was great was, actually getting questionnaires and user feedback surveys from you and being able to respond to them and know that someone on the other end is actually going to read it [laughing] and is actually going to interpret what I was trying to say.
IVAN: Yeah, so, I use the one-on-one tool vigorously. I used to use Google Docs, that was my thing. I went to Google Docs, and we used to do in person one-on-ones once a month when we had an office. And when I saw it pop up as a feature in Know Your Team, I was like, Yay, I can get rid of all my Google Docs and just have it all in there.
IVAN: Yeah. That was awesome.
CLAIRE: Oh, I’m so glad to hear that, Ivan. It’s been one of the biggest hits. I think the thing that’s interesting, or the thing that makes Know Your Team different, right, and this is so cool to hear from an actual customer. It’s almost like you sat in on our team meetings or something. [laughing] Because you said it yourself, Ivan, which is that it’s actually about a methodology. That’s in fact what we’re “selling” and offering and giving people. It’s not so much the piece of software. The software itself, I mean, it’s beautiful, it’s well designed, you know, but it’s the fact that when you really think about helping leaders and their team change their behavior, that it all starts with understanding that deeper core of why? In what way? Why should I change my behavior in this way? For what? And why does that matter?
And so, we spent a ton of time developing the methodology and trying to parse the research to figure out what that methodology should be.
IVAN: And I think when you’ve done that it now opens up your market as well because you’re no longer having to focus on companies and leaders that are between the 50 and 200 employee range. Now you’re kind of going smaller to go bigger. Right?
CLAIRE: I love that, yeah.
IVAN: You’re focusing on teams that typically are what, eight to 10 to 12 people, maybe 20. A manager that is responsible for that many people, and those teams could be inside large companies, inside corporations. And so, that was a really smart business decision I think.
CLAIRE: Well, thank you. It’s a really long answer to your original question, I realize, which is you just asked me why we changed our name. [laughing]
IVAN: [laughing] Well, that’s why. Now we know.
CLAIRE: Yeah, so, to answer your question from the beginning, it’s because, yep, we decided to serve actual teams. So, I love that phrase, we went small to go big.
IVAN: You can use it. It’s yours. [laughing]
CLAIRE: I’ll take it. [laughing]
IVAN: Now, a little earlier we talked about how the cost was $100 per employee for life. And when I first saw that I thought to myself, This is brilliant. I pay for it once and I forget about it. Then I thought to myself, Okay, as a business owner, how do I ensure that I have recurring revenue after a couple of years of this employee? Because basically my desire is for my team to be happy. And if my team is happy I don’t have turnover, and if I don’t have turnover, then the average span of my employee staying with me is pretty long, at which point the company that’s enabling me, Know Your Team, are out of that $100 per-employee revenue of people that I am hiring.
IVAN: So, do you remember the original thought of the once-per-lifetime pricing was there?
IVAN: What was the impetus of that? Because you don’t see that very often.
CLAIRE: It’s pretty unique. Yeah, people are always intrigued about this, and there’s a lot I could say. The origination of it is actually not my own idea. It was one inherited from Basecamp, and I believe their data person at the time is the one who came up with it. And the original idea why they did it is because they didn’t know how long it was going to be around for. It was a prototype for them. It was like this fun product that they wanted to try, and it’s like, What’s a simple thing that helps them get up-front revenue and sort of test the idea. And so they just tried it.
Now, when I inherited the product in that new pricing model, then I had a decision, am I going to keep it or am I going to change it to something different? The reason I chose to keep it is actually because I noticed something really interesting that happened because of the pricing model, which is that because you are having CEOs invest maybe at minimum 10K, right, and maybe if they have 50 employees it’s 5K, if you’ve got more it’s 8K, etc. It’s not trivial. So, all of a sudden it’s up, invested more than just say, 25 bucks a month, or 40 bucks a month.
So, the energy that the CEO will then put into talking about the tool in the beginning, getting people excited about it, engaging in it, actually looking at the tool itself and answering questions was quite high. So, it actually became a sort of sunk cost for the CEO and encouraged the kind of behavior that we wanted to see people using, in using the tool.
So, that’s the reason I decided to keep it, is because I was like, Oh, this actually helps influence the way people are using the tool, which is in line with the way we want people to be thinking about the tool, which is that Know Your Company shouldn’t be seen as this feedback product that you can turn off anytime you get a piece of feedback you don’t like. Right?
CLAIRE: Cause when it’s like 40 bucks a month or whatever you’re like Ah, let’s just stop it. Versus if you invest two grand up front you’re like, We’re going to really try. We’re going to try and listen, and this is going to be an initiative, and it’s a program.
IVAN: There’s skin in the game isn’t there?
CLAIRE: Exactly. So, that’s why we did it. The other sort of reason that we didn’t realize [laughing] that ended up becoming really useful at the time is it also got us profitability extremely quickly as a good startup company. When I first took over for Know Your Team, I mean, we started at zero in the bank [laughing] and it was like, Ok, well, let’s sell to folks, see what happens, and we became profitable in the first month due to this pricing model.
CLAIRE: And I think it would’ve taken at least a year and maybe four months to get to profitability had we been on a subscription model.
IVAN: I got to be honest, I [laughing] only realized that you had actually gone to the subscription model today when I was doing the research for the podcast episode, because I think I’m still grandfathered into the old $100 program.
CLAIRE: You are. So, here’s what we did. So, then when we moved to Know Your Team, we thought, Okay, we'll do we keep the same pricing, or do we do something different? And we decided to definitely do something different, because like I mentioned earlier, two grand for a manager makes no sense up front.
CLAIRE: It just doesn’t make any sense. So, we have a new target audience right? We have managers, so this means the pricing’s got to change. So today what we charge is, we charge just 30 bucks per month, per manager. So, you don’t do it by user, so you can have as many employees as you want. We charge per manager because that’s who we feel we’re delivering the most value for. And, when we made the price change, like you said, Ivan, we decided to grandfather in everybody who had the old pricing model, unless they decided for some reason they preferred the other pricing model. But, yeah, that’s how we decided to move forward.
IVAN: You kind of got the best of both worlds because you were able to take advantage of actually up-front cash that your customers are giving you in the first year or two. And then when that revenue starts to not be recurring anymore, when you actually do have to have some sort of recurring revenue, you’re able to change your business model so that you had that recurring revenue coming in. I think you’ve played it well.
CLAIRE: Sounds a lot more elegant in hindsight, I think. [laughing]
IVAN: [laughing] Yeah, when you’re doing it, and kind of reacting to the circumstances, it doesn’t really feel like it’s that well-planned sometimes. You try to be planful, but who knows what the circumstances are going to be like coming up.
IVAN: A couple more questions. One of them is the same question you asked at the beginning of your podcast. The one that you had Jason Fried ask you on your 50th episode, [laughing] and I’m going to ask you again the same question that he asked you, and maybe give you an opportunity to reflect on the answer that you gave. The question is: what is the one thing you wished you had learned earlier on as a leader?
CLAIRE: Yeah. It is funny, because I’ve literally asked this question to over 50 different leaders, and I will say actually, everyone has had a different response, which has been really remarkable. But when I try to answer this, Ivan, and you may have seen [laughing] this on the podcast itself, I got a little stuck. I was like, That’s actually...huh.
And, I’ll share what I told Jason, and then I’ll share maybe one other one, that sort of now I’m having more time to marinate on it, I feel like it’s true which is that I really wish I would’ve learned how to trust myself earlier. And that I think when you are first starting out as whether a new founder, or you’re a first-time manager, it’s very easy to seek out what has been the accepted models for success, and then to look for patterns for how the person got there.
So, as a result, you do a lot of snapping to grid of, Oh, this is what this person did when they ran their meeting so I’m going to try and emulate that. Or, I talked to a mentor about a certain situation, and they’re giving me feedback that I should talk about this to my team so I’m going to do that. And the truth of the matter is that each person is so different. So, so different. And no one has ever in the history of anything been exactly in your specific situation as a leader, nor have they ever exactly been you.
So as a result, there’s no real true model of success to actually be following. And at the end of the day, for whatever outcome you’re looking for, the most important thing that you could be doing is trusting yourself in that. That doesn’t mean to ignore advice or not take in information, but it means to understand that any seeking of an ultimate right answer is never going to come, and oftentimes the answer is in yourself.
IVAN: So eloquently put. [laughing]
CLAIRE: [laughing] Thank you.
IVAN: I love the answer. I love the answer.
CLAIRE: Oh, thank you.
IVAN: A final question. What are you looking forward to? What’s coming up for Know Your Team? What’s coming up for you personally? Given all the pandemic quarantine that’s around us right now. I’m kind of looking for a light at the end of the tunnel, or what’re you most interested in that’s coming up?
CLAIRE: Sure. Well, I think the things I’m most interested in are, or energized by is just the ways that we are planning to improve the product in the next six months. We are planning a lot of [laughing] really awesome things in the pipeline.
CLAIRE: Yeah. And we’re planning to move as quickly as we can on them. And so excited to see these new features built out. One of them in particular, and I don’t like to share the roadmap just in case we do change our mind, so I’ll just give a vague teaser. But, one of them in particular is a really, really core part of our methodology that from day one I wanted to build out, but we just knew we didn’t have the time yet, and we needed to do a few other things to the product first before we could do that.
So, I’m very, very excited for that piece, and it’ll be a big pillar of that’ll fall under the trust, honesty and context methodology that we’ve developed. But I think as of today, Know Your Team is really great, but without it I think it’s actually a little incomplete, quite frankly. And so I’m really excited to ship that. Hopefully we’ll have that definitely before the fall. And then we have a few other features in the pipeline right now that’ll come out before that. So, really excited about that.
And then, the other things that I would say I’m most excited about are continuing writing and doing the Workshop Live! sessions. We’ve gotten just so much incredible feedback from folks about both, but particularly the Workshop Live! session, so we have hundreds and hundreds of folks from all over the world who will tune in. There was one I held yesterday where we had a couple hundred folks from all over the world who tuned in on “How to Lead in a Time of Crisis.” So, I’m really looking forward to sharing more expertise about relevant topics. We’ve got one coming up on “How to Build Trust in a Team Environment,” which is very timely. A lot of people feeling, like [laughing] we were saying, we need more trust in remote teams.
CLAIRE: So, those are the things I’m looking forward to, for sure, Ivan. Thanks for asking.
IVAN: Yeah, I’m looking forward to it to maybe attending some of those sessions as well. I’ve been quite involved in the Bureau of Digital’s community, and they’ve been just an incredible support throughout this whole COVID-19.
CLAIRE: Ah, that’s great.
IVAN: Yeah, it’s been great, and it’s nice that there are so many trusted communities out there that are available for people to join and for people to be a part of. It’s nice to see.
CLAIRE: Thank you. I love it. Well, thank you so much for having me on the show, and for your questions and for your interest in the backstory [laughing]. I appreciate it.
IVAN: Yeah, thank you so much for spending your time with me today. It’s really been amazing talking to you, and I hope we can get a chance to do that again in the future.
CLAIRE: You bet.
IVAN: Claire Lew is CEO of Know Your Team, and you can find them online at knowyourteam.com, where you can sign up for the service, read Claire’s blog and of course, subscribe to her podcast. You’ve been listening to The TEN7 Podcast. Find us online at ten7.com/podcast. And if you have a second, do send us a message. We love hearing from you. Our email address is email@example.com. Until next time, this is Ivan Stegic. Thank you for listening.