#1253 Howard Lerman | Serial Entrepreneur Shares Cheat Codes For Startups

Howard Lerman is the co-founder & CEO of Roam. Howard previous built Yext, and took it public at a multi-billion dollar valuation. This conversation was recorded at the BUILD Summit in New York. In this conversation, we talk about tips, tricks, & hacks of a second time founder, 5-minute meetings, how Howard constructs the board, calendar zero, and many other insights. ======================= Trust and Will has simplified the process of creating and managing your will or trust online. They leverage a data-driven, design-first approach and amazing customer support to help you protect your legacy from the comfort of your home starting at just $159. Sign up today for 10% off using ⁠⁠⁠⁠⁠⁠https://trustandwill.com/pomp⁠⁠⁠⁠⁠ ======================= Get Better Crypto Data: Do you want faster, easier crypto data? Sign up for Velo Data, a new product that we have been working on to solve this problem: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠velowaitlist.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ======================= Pomp writes a daily letter to over 250,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. The following episode is with Howard Lerman, the co-founder and CEO of Rome. Howard previously built Yext and took it public at a multi-billion dollar valuation as well. In this conversation, which was recorded at the Build Summit in New York City for 700 founders live,

• 0:45Anthony Pompliano?

  we talk about all the tips, tricks, and hacks of a second time founder. Howard goes over why he holds five minute meetings, why he immediately announces a chairman of the board, and a number of other things that he does to attract the best talent, build great products, have a great company culture, and ultimately be successful. I always enjoy talking to Howard, and these tactical conversations provide tons of value of things that you can immediately go and implement today in your business. I hope that this is valuable to you. Here is my conversation with Howard Lerman.

• 1:17Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 1:41Anthony Pompliano?

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• 2:23Anthony Pompliano?

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• 3:06Anthony Pompliano?

  trustandwill.com/pomp. Before we get into this episode, I also want to tell you about a brand new product called Velo. Velo is faster, easier crypto data. Everyone in the industry is always looking for, what's the price? What's going on on the exchanges? Where are assets flowing or not flowing? How is things like open interest and derivatives actually playing out in the market? Well, that's where Velo comes in. It's faster and easier crypto data. You can go to velowaitlist.com today. Myself and a couple of friends, we invested in the business, we're advising the founder, and we think it's pretty cool. This one is something that keeps me informed on a daily basis. So you should check them out at velowaitlist.com. That's V E L O waitlist.com.

• 3:53Anthony Pompliano?

  Howard is now the co-founder and CEO of Rome. He is the former co-founder and CEO of Yext, which he took public here in New York City. And we're going to talk about hacks, tricks, tips of a repeat founder. Many of the things we're going to talk about today, I think, go against conventional wisdom, or what many people would say is common sense. So first, mentality wise is where I want to start. You start the first one, you eat glass for a while, it works, you take it public, you get to like raise the trophy, ring the bell, you win. Why the fuck are you doing it again?

• 4:37Speaker 02

  I'm obviously got a sickness. I started to roam the next day after I stepped back from Yext. I incorporated the company. So I think it really now it's interesting because when you think about the energy that you use as your company grows, there's different phases of every company. So, you know, kind of going from zero to one is very different than running a global public company at scale. So the actions you have to take change over that time. So while I may have depleted all of my sort of stamina around how to talk to public market hedge funds about EPS last quarter, I had a lot of energy reserves built up for a zero

• 5:22Speaker 02

  to one type of innovation period. So it was not that hard to kind of just shift, given that I had a lot left to do this. But yeah, I'm fucking crazy.

• 5:33Anthony Pompliano?

  Some of the things we're going to talk about today are not just theories you have. You're actively doing it as you build a room. And so one of the things that you did, which I think surprised people very quickly, is you named one of our mutual friends, Brent Saunders, as the chairman of the board. You are a startup. Having a board sometimes is even unique for a startup, but the founder not being the chairman of the board, I think is very rare. Why did you do that?

• 6:00Speaker 02

  So this is one of my first hacks and I'm actually kind of shocked that more people don't do this. When you are starting a company, you have maximum leverage to do whatever you want and particularly construct your board. And board construction isn't really something that you think about until later on. But what you want to be doing as much as possible when you start your company is stacking the board of directors. We're talking about the board of directors here. I assume everybody knows what the board of directors is. You want to Stack that in your favor as much as possible early on because the decisions that you make on day one, like, stay with you forever. It's kind of like if you write something in your corporate charter,

• 6:42Speaker 02

  even when you go to raise an A and a B and a C in further rounds, it tends to not change. These things tend to stick. And so, for example, if you have two co-founders and you put all three of you on the board, like, when you go to raise an A round or a B round, usually, somebody's not gonna say, "Oh, you have to kick someone off the board." So all of a sudden, if you're thinking about, "Should I put two people on my board or three people?" Now you have three board seats instead of two. So you basically stacked the board deck in your favor out of the get-go. Now, you can sort of take this to the next level. And every board has a chairman. And the chairman is simply, it can be interpreted however you want operationally, but the chairman is actually really just a ceremonial title.

• 7:26Speaker 02

  They don't really do anything. They literally have one function, which is to call the meeting to order. So, it's like, kinda like you guys up here just calling the conference order for the day. They stand up here, they do it, and then, like, the chairman can do whatever they want, the chair. So, as you're, the earlier you are, the more likely you are gonna be able to sort of set this up in your favor. And so, I named, like you said, Brent Saunders, the chairman of Rome. And why would I do that? I mean, look, I've run a public company, I've done billion-dollar IPOs, I've raised half a billion dollars of capital. Why do I need somebody to kind of, like, go along this? And the fact is that it doesn't matter where you are,

• 8:11Speaker 02

  there's always someone that has done more shit than you. And Brent is the perfect example of that, because Brent ran and was the CEO and chairman of Allergan Health, which is an 84 billion, 83 billion dollar pharmaceutical company. And so, you know, you can kind of keep leveling up, and you're really just a function of the people around you as much as possible. So I just wanted to, you know, since my objective this time around with Rome is to go to that level of scale, I wanted someone that had kind of charted those paths before. But- The coolest thing is if you put, if you have a VC, now let's say you're not incubated, but like you have a series A investor and they're a venture capitalist and you go to that VC and say, "Look, you know, I think we should, I'd like to find someone better

• 8:55Speaker 02

  and smarter than me to be the chairman of the company. And by the way, this person is the founder, the CEO of a 50 billion or $10 billion Fortune 50 company." People, the VC will say yes to that. Like it's a, it's a, it's a really good signal for your company if you can get somebody that's been on public boards and has been the CEO of something to join your board. It's a huge signal of strength to investors. It's a huge signal of strength to customers that somebody of that caliber is willing to, to take it on. And frankly, a lot of these people that have done these kinds of things before are like open-minded to being like the chairman of a startup. They think it's cool. I've seen this happen before. So, you know, Sprintor, for example, has, has a chairman that was

• 9:40Speaker 02

  like a very high-level executive at Cisco. So I just, I think it's a really good technique to first off, stack the board in your favor. Second, give someone, get someone in there in the room that really can just do a totally different thing than you're able to do since you're trying to go from zero to one and they may have done something way bigger. And then, and then third, really set yourself up for the long run in having a board construction that's going to be to your favor.

• 10:08Anthony Pompliano?

  You do five-minute meetings.

• 10:11Speaker 02

  Teddy Roosevelt did five-minute meetings.

• 10:13Anthony Pompliano?

  And Howard Lerman.

• 10:15Speaker 02

  To, let me say it like this.

• 10:20Anthony Pompliano?

  Why do you do the five-minute meetings?

• 10:22Speaker 02

  By the way, I like sometimes just wish I like could ride in here like on a horse, like a rough rider. Teddy Roosevelt used to do these five-minute meetings. Have you read The Bully Pulpit? We talked about this.

• 10:35Anthony Pompliano?

  Yes.

• 10:35Speaker 02

  Yeah. The Bully Pulpit by Doris Kearns Goodwin. She's one of my favorite authors. She's presidential historian. You know, she's written the, the book about Lincoln and all that kind of stuff. But this, this particular book about, about Teddy I was reading and it turned out that Teddy Roosevelt, one of the most remarkable people you can imagine, did meetings in five minutes. Now, we all schedule thirty minute meetings and sixty minute meetings and forty five minute meetings to talk about shit that's way less important than the president used to decide in five minutes. So, I'm like reading this and I'm like, my goodness, why do I need forty five minutes for a, you know, certain type of design review or whatever, when the president of the United States would probably make, you know, have a five minute meeting and make decisions about this.

• 11:17Speaker 02

  And so, I actually at Yext instituted five minute meetings. And I think you have to be intentional with how you use them, but the way that I started to do these five minute meetings was, for example, when we began to expand to Europe. And we had a hundred people in, a hundred twenty people in London, a hundred people. And I was able to meet with basically all of them in a day. All one hundred people in one day. And what we would do is set up five minute meetings. And here's how it works. And the key pump is you have to be really intentional and prescriptive and run it by the clock. So, I would put a clock there. I'd have someone, you know, knock on the door when thirty seconds was left so that you had a good feeling of the time. And then, I would simply ask, what are you working on?

• 12:02Speaker 02

  And when you ask someone what they're working on, and then this is pretty important, I can be a little intense. So, I would not make eye contact with the person while they answered. I never take notes. Do you take notes, by the way? No. Yeah, I never take notes either, but I would pretend to take notes. Because it was a good sort of decoy into not making eye contact with them because I didn't want to scare the fucking shit out of them. So, you begin to absorb, they begin to talk, and you'd be shocked how long five minutes is. If you, once you begin to really get someone going. A Super Bowl ad is thirty seconds. So, you get like ten ads in a row, basically, in five minutes. And...

• 12:44Speaker 02

  If you listen to them and hear them, you can absorb a ton. So I would do like, you know, eighty meetings in a day. It's four hundred minutes. It actually went by pretty fast. I had a giant pile of notes when I was done that I discarded, but I left that with a very clear sense of everything going on. And the company would love it because I would get to meet everybody that was in the London office and they would get five minutes with the CEO to tell them what was on their mind. And I would simply ask, tell me what's on your mind. Tell me what you're working on. And frankly, a lot of times, people would get it out and then it would be over and then they'd end early. Just, you know, the more intelligent people are, the more they begin to do higher level chunking with concepts. You know exactly what I'm talking about because that's how the human brain works. It's like the fox

• 13:29Speaker 02

  in the, you know, it's like sour grapes. That term comes from, you know, the story, the fable of the famished fox that was looking at them and couldn't get them and then decided, well, fuck, I didn't want those grapes anyway. I couldn't get them. So sour grapes is a term that we all understand. And so people that are working together closely and are highly intelligent and working towards a shared mission are able to begin to chunk at higher levels and do and convey faster concepts to each other, which means you need less time to actually communicate.

• 13:59Anthony Pompliano?

  You make a lot of people the founder. We heard yesterday advice that maybe there should be like one founder. And if you bring on a second or third founder, it's kind of later in smaller equity. You take a different tact, which is a classic, it depends type answer. Why do you make so many people the founder of the company?

• 14:18Speaker 02

  It's interesting because being a founder or not is actually kind of like a random point in time. And, you know, you all are founders. You may have people that are co-founders that may, had they come with you a year later or two years later, they wouldn't technically be founders. Sort of being a founder or not is clearly, there's one that, there's the founder that makes stuff like the whole thing happen or a couple of people that make it happen. But then there might be some other people that are around you at that exact point in time. And if there are other people that are around you at that exact point in time, this gets to my next sort of cheat code or hack, which is to make them a founder and give them founder's equity. This is a little bit of an unconventional stance.

• 14:59Speaker 02

  At Rome, we have, I believe, 18 people that are technically founders in the cap table. The wealth creation opportunity for someone who is a founder versus not a founder is stark. And I actually don't, you have to use them, but I don't really love stock options as a compensation tool because I think they're, first off, nobody knows how to value them properly. Everybody values them differently. So you could offer the same stock options package to somebody, another person, and they, they literally have no idea how to, how to, how to value it. The tax treatment is absolutely terrible. You get short-term tax treatment on, on stock options. So that, and that has no bearing on like what the sort of person here contributed or

• 15:44Speaker 02

  not. So by making someone a co-founder or a founder out of the gate and giving them founder's equity, one of the main things they actually get right away is QSBX tax treatment, which means that their first $10 million are tax-free from the, from the feds if you're not in California. And so this is just like a, a windfall. And if you have an outsized success for your company, it actually means, and if, if you ever get shit about this from like a VC or something where they're like, "Why would you make all these people founders, blah, blah, blah, you're giving up too much stock." If they get better tax treatment from the QSBS thing and can save up to $10 million tax-free, you can give less shares. That'll be worth more money and create this win-win where the person gets long-term treatment,

• 16:29Speaker 02

  QSBS, and you don't have to give out as many shares to give them the same amount of value that they otherwise would have had. So it just seems like a pretty no-brainer kind of thing to do. And you can still have the stock vest and, and, and take it away if, if you fire them or they leave. They, you know, the vesting can happen in a traditional way, in the same way that stock options vest. Just the tax treatment's so much better. But then there's also the matter of pride. And if you let someone go around, let someone. If someone can go around and say that they're a founder or something. It really changes their conviction level. It changes their contribution level and they're in the trenches with you and along with you for the ride.

• 17:13Speaker 02

  So I recommend, if you can, bring people along for that ride, as many people that are gonna be along for that ride and make them a fucking founder.

• 17:21Anthony Pompliano?

  You host a lot of events, but you have this idea of hosting customer dinners for VIPs.

• 17:30Speaker 02

  This is another trick. I was actually talking to a founder, so about three weeks ago, I went to Saster. You guys know Saster, the Jason Lemkin's conference, not as good as this, obviously. And it's really focused on-

• 17:43Anthony Pompliano?

  I paid him to say that.

• 17:46Speaker 02

  Free stage time. It's for SaaS, you know, SaaS, SaaS-focused companies and it's kind of got like the Dreamforce type thing. It's like the anti-Salesforce, anti-Dreamforce kind of conference in San Francisco. And we had a dinner, we hosted a dinner on Wednesday, you know, one of the Wednesday nights there. And there was another founder who I invited to the dinner and she's a founder of a great startup here in New York and they're doing awesome. They're B-series, probably 15 million of ARR, maybe a little less, but growing pretty nicely. And she's like, "I'm sorry, I can't come, we're hosting our own dinner." And I talked to her the next day and I was like, "Well, how'd your dinner go?" She's like, "Actually, like, we had a lot of trouble getting people to come, there was like, people didn't show."

• 18:30Speaker 02

  And she's like, "Well, how did your dinner go?" "Well, here's what we did." Do you guys know Scott Belsky, who's the head of Adobe Creative Cloud? So I saw he was a speaker at the conference. So I pinged Scott, I was like, "Scott, can I host a VIP dinner in your honor at Nobu?" And he was like, "Well, I guess I'm gonna be in town." I knew he was from New York and so he's like, "What's he gonna do that, of course?" So he's not gonna have anything to do. So Scott's like, "Sure." So then I just started emailing founders, like, "Hey, I'm hosting a VIP dinner for Scott Belsky, you wanna come and meet Scott Belsky?" So I just hijacked his name and got 32 people to show up to Nobu that all came and we had a really high response rate.

• 19:15Speaker 02

  So you should do that. That's a really good trick. As opposed to, "Hey, come to my startups dinner. It's gonna be really cool and I'm gonna promote my product and sell my product." And by the way, he was absolutely brilliant. The kinds of tips and techniques and things he said were that people wanted to, you know, with the future of Figma and all the Adobe strategy around all that kind of stuff. I mean, he's the one that spearheaded that acquisition. So people that use, I mean, how many of you used Figma in the last couple of days? Like, looked at a design model? Everybody. So people were asking about that. Obviously, there's antitrust issues there. But just being able to kind of hear from a founder, a unicorn person, then had gone on to start a big, you know, to run a big company

• 19:59Speaker 02

  and is a number two or three executive at one of the world's largest software companies is a compelling kind of thing versus, "Hey, come to my startups dinner. It's gonna be awesome."

• 20:09Anthony Pompliano?

  When you went to raise money for Rome, I think you texted me and said that you were starting another company and you wanted me to come see the product. And so I said, "I'm in. When do you want me to come see the product?" And you let me put a couple of little pennies into Rome. But I was surprised at how low the valuation was when you sent the docs, because no matter what valuation you would have picked, I and many others would have invested. Why do you think keeping the valuation low is so important?

• 20:36Speaker 02

  How many of you are concerned about dilution?

• 20:40Speaker 02

  I really think that it is incorrect. I think pretty much you're gonna, I'm sorry, like, you're gonna have a binary outcome. Like, the thing that you can actually do is fuck yourself if you raise at too high of a valuation because it limits your optionality. Pretty much acquisitions in M&A really only happen at a few levels. There's kind of sub $100 million. Then there's like 250 to 300. Then you get to like the 800 range and then there's the billion dollar plus, in which case you've already won and it doesn't really matter if you own 8% or 12%. When you sell your company for like $2.6 billion, you're gonna make kind of a lot of money and you don't really care about it at that point. And the thing, though, is that a lot of people that could get rich if that sub $100 million or even $300 million level

• 21:25Speaker 02

  raise money at that valuation, thinking that it makes them feel good that their company is worth that. But let me tell you something about when you raise money. Your company is not worth that number. That just means that one person has decided that there's like a 1 in 10 chance that your company's going to be worth like a lot more than that number. It doesn't mean that your stock is worth that amount. It means that there's a probability that your stock is going to be worth a higher number than that amount. And so the VC, the venture capitalist is clearly playing that game. It's their advantage to have, you know, as many different bets as possible. And when you run all those different bets together, they end up with outcomes that ideally are in excess of what they've invested. But in the case of you, you have a binary outcome.

• 22:09Speaker 02

  It's either going to be zero or one. And if you raise money at too high evaluations, you preclude yourself sometimes from lower outcomes, which could end up being highly advantageous to you personally, but not so much your VC. So my recommendation in general is to not, and I'm not trying, like, I didn't do this because I, now, there's another side of this too. I'm not trying to sell, Rome raised at 90 million, 95 million. We're not trying to sell. I wouldn't sell for many multiples of that right now. That's not our objective. There's another reason too, that you want to maybe keep things a little bit lower than you otherwise would. Number one is when you issue stock options, which is an instrument, which I hate clearly, that happens to the forward on a value. But I still hate that instrument.

• 22:54Speaker 02

  It's a necessary evil. You want to keep that as low as possible because you want your employees that are with you to be incentivized, to be along for the ride and have as much skin in the game as possible, number one. Number two, I just think it's better, and you saw this happen with Instacart, they priced their IPO a little bit lower, and everyone's like, oh, Bill Gurley, they left money on the table. If I had his Texas accent, by the way. But the point is that, you know, you, you sort of can price it a little lower, which yes, technically costs you money, but it gets you people that are there for the long run. So, you know, Pomp, I, by pushing, by not maximizing valuation the first time, I now

• 23:34Speaker 02

  have you more aligned with me for the long run because we're, there's nothing that, that gets someone on your team than being in the money together.

• 23:43Anthony Pompliano?

  You have this idea of memorizing lines to make perfect copy, which is something that I don't think a lot of people think about. Why is that important?

• 23:54Speaker 02

  So John Lennon used to...

• 23:59Speaker 02

  When he would come up with a song, he would sing the song and he would then put the guitar or piano down and then come back to it the next day. And if he couldn't remember the song, he would think to himself, "Why should some kid listening to the radio remember the song? If the author of the song can't remember it, how will it be memorable to the people listening later on?" So he used that as a standard for whether or not a song was good enough. Now, none of you all have to write music or copy as good as John Lennon or an author or artist, but it turns out that the mere act of memorizing something is an editing function.

• 24:44Speaker 02

  And when you go out and you memorize your lines, your brain, the human brain actually kind of has a bug, which is a feature. The feature is the human brain won't remember stuff that's not good, which is awesome if you think about it, because it means that it only remembers stuff that's really good. So if you can exploit that feature, it means that you can do this. And so if you've got like a speech or you've got something you want to say, I think going through the process of memorizing it will make it probably tighter. It will, especially if you do it verbally. Like if you go back to ancient times, like it used to be the orators were like the ultimate way to communicate.

• 25:29Speaker 02

  Today, we're all written, we're all reading. That's not how it used to be. In fact, I could be wrong about this, but I believe that one of the ancient philosophers was sort of killed because he wasn't ready to orate at the level that he was expected to orate. You're sort of smiling because you obviously know the story too. Point is, when you memorize your lines, you make it chunkier. You chunk it up into these sort of better concepts that people can identify with. It's faster, it's better, and it ends up being, it's almost like a meme.

• 25:57Anthony Pompliano?

  So something you and I've talked a ton about is this idea of calendar zero and no one-on-one meetings. If someone starts a business, especially the first time, they have direct reports, how do I communicate with them? What is the pace that I should talk to them? Should we set up meetings every week? Should they be every other week? Should they be three times a week? How long? You don't do any of that shit. Why not?

• 26:19Speaker 02

  I hate calendar. I hate, I hate one-on-one meetings. I think one-on-one meetings, how many of you do one-on-one meetings? Everyone's gonna tell you this is a very contrarian approach. So you do one-on-one meetings because people tell you that this is a time for you to catch up with your employees and it's a time where they can kind of come to you with their concerns and blah, blah, blah, blah, blah, blah, blah. You know, I was reading, I was reading about Jen Senhong. He has 45 direct reports. He does no one-on-one meetings. This sounds like Steve Jobs. One-on-one meetings-

• 26:50Anthony Pompliano?

  Steve Jobs had 30 direct reports, I think.

• 26:52Speaker 02

  30 direct reports. Yeah. I mean, it's not just a way for him to be leveraged across more people. It's also just a way to cut out a bunch of, you gotta collapse the stack. That's a whole other thing. But this, this point about no one-on-one meetings. So one-on-one meetings tend to clog up your calendar. So if you have 12 direct reports and you have a one-on-one meeting with each of them each week, that's like 12 hours. And if you work, you know, 72 hours a week or whatever, that's one-sixth of your week, which has just gone away into literally one-on-one meetings, which is not productive and also burned up their time. There's another part about this too, which is like, it's not obvious to me that you should be having private conversations with people that the rest of the team can't see or hear. And so like, if you come up with a great idea and it's in a one-on-one

• 27:36Speaker 02

  or something, or you're working on something that other people are tangentially related to, I just think it could be better to have that conversation in a group setting. And so then you begin to think about, okay, well, what are the kinds of conversations that do need to be private and are private one-on-one conversations? And guess what? Those tend to be things that you shouldn't even be talking about in the first place or just a fucking waste of time because it's just people complaining. It's just people thinking about their own, you know, career advancement, which, which is important, but doesn't need to be addressed every week in a one-on-one setting. And it tends, it tends to turn into a therapy session, which, you know, you, you are probably not a licensed therapist and therefore shouldn't be doing this.

• 28:17Anthony Pompliano?

  When you have so many direct reports, you're not delegating anything. And this is something specifically young founders, I think, are told, build a team, trust your people, do all of this. If you go and you look at everyone from Mark Zuckerberg all the way on down today, these dudes are micromanaging.

• 28:36Speaker 02

  Yes.

• 28:37Anthony Pompliano?

  To a degree that would scare most people. Why?

• 28:43Speaker 02

  Every, as your company grows, the first thing that a VC is going to tell you is, you need to figure out how to delegate. And then they're going to start to introduce you to some people. They're like, hey, you should meet Charlie. Charlie ran sales enablement at Salesforce. You know, this person ran something at Oracle. And they really, you know, just have a conversation. They start to throw these weird sort of people at you. And you're like, what the fuck is this? Like, what is sales enablement? What is, you know, all this stuff? And then these people come in and they show up and they have, they, they're awesome. And like in an interview situation, you start to talk to these people and, and they're,

• 29:25Speaker 02

  they're so good at talking about like all this stuff that sounds great. And then you're like, what the fuck did they just say? And it's, it's, they, the, one of the, the, the things that you have to be like a buzzword, a key word here, which is like, for me, a big red flag is when I hear the word playbook. Like, whoa, we come in and we run our playbook here. Their playbook is to actually hire a bunch of people to run a playbook that also then do the exact same thing recursively all the way down the chain. So, you know, what I would recommend is to delegate nothing. To do as much as you possibly can to identify what you specifically are awesome at, like your superpower. If that's product, then don't delegate product. If that's a particular part of engineering, don't do it.

• 30:09Speaker 02

  If it's business development and you're doing deals, don't delegate that. You can have some people that help you do those things in support of you, but don't just like try to replace yourself with someone that's going to do that. So then you can focus on bigger picture items and scale and stuff. You may need to hire specialists in other areas. Finance is one in particular that as you grow, and if you want to get big and run a public company, you'll have to hire a CFO specialist and they will have their playbook and it will be fucking expensive and they'll be hiring all kinds of people and auditors and all this kind of stuff that come in. That's all, that's all par for the course. But when it comes to the unique thing that makes your company special. Look, Mark Zuckerberg still wakes up every day and I guarantee you the first thing he does is

• 30:50Speaker 02

  check the threads stats. I guarantee it. Like, he's looking at how many threads were yesterday. That's, that's like what he lives for and he doesn't need to be doing that still. Uh, and that's just what a founder ought to be doing. You just don't give up what is core. Keep it as close as possible.

• 31:08Anthony Pompliano?

  As someone that worked at Facebook, I guarantee he's looking at the stats every single morning. Sunday night exec calls is something that you do. What are those calls? What are you guys talking about? Who's on them and why do you do them?

• 31:20Speaker 02

  So I love to just kind of get the team. Do everyone, how many of you work Sunday nights? Everybody. Everyone's working Sunday nights. Uh, so everyone's working Sunday nights anyway and you kind of around eight or nine PM, you start to kind of come back after your weekend or whatever and answer the emails and start to catch up. Why not just get everyone together for an indefinite amount of time, which could go from one to four hours, uh, beginning eight PM, uh, and sort of just get through all that. That way the whole, the whole team is ready to go, you know, nine AM Monday morning. So this is something I've been doing for fifteen, seventeen years, just a Sunday night exec call. We don't turn the, there's no cameras. It's just, it's a

• 32:05Speaker 02

  call. It's just a, it's a way for everyone to kind of get aligned for the week. I actually read Tim Cook does this. Uh, and if you, if you think about Apple, it makes complete sense because he's probably, you know, talking to Asia, which is already the next day for them by, by that point. And they're thinking about the supply chains and they just, it's a way to kind of stay a step ahead. So I, I think a Sunday night exec call almost saves your team a half day, a half day. Otherwise, if you do it Monday morning and it's a one to four hour call, then it's like nine to, you know, noon that next morning, you know, for, for a full morning for the, the company. And then it's like, okay, well, we just had the meeting. And so now like, you know, I'm in that sort of afternoon energy and I'm not ready to like crush the actual tasks. If you do it the

• 32:47Speaker 02

  night before, you can wake up that next morning and, uh, you know, as, as someone said, today's going to be amazing. Let's crush it relentlessly.

• 33:01Anthony Pompliano?

  Something that you taught me is there's a difference between remote work and distributed work. And my thought process of it is that there's in office, everyone knows what that is. What is the difference between remote work and distributed work?

• 33:18Speaker 02

  Well, I kind of think the whole remote work debate is kind of stupid. A hundred percent of successful companies have people everywhere. Doesn't matter if you're an agency, a tech company, a doctor's, a hospital, you've just got your people everywhere. And the more big you get, the more places your people are just gonna be. There's gonna be specialists in Canada, you're gonna have call centers in the Philippines, you're gonna have engineering centers potentially in different areas across the country. You might have reps in the field, you have your sales reps everywhere. The founder and CEO, you're all here in New York right now, you know, where should you be? You should probably be with customers if you're not working on your product.

• 34:02Speaker 02

  And so a hundred percent of successful companies are distributed, the people are everywhere. And so for me, when I was running Yext, we had offices from Berlin to Beijing. And I always just wanted to kind of have in my pocket, the whole company in one headquarters from anywhere. And that's why I founded Rome, because I wanted to solve the problem of being able to have everyone in one office, even when they couldn't physically be together. Because when you're all here, when we're all in, under this one roof, and if we're all in desks and working and stuff, we have these quick, fast conversations. And, you know, as, as we've moved to this sort of Zoom calendar industrial complex,

• 34:47Speaker 02

  which I think Sam Lessin called it, we've all now begun to block these 30 and 60 minute Zoom calls for internal stuff. And that is why, you know, I founded Rome, to get out of having to have that, so you can just get back to having these fast, short conversations. So distributed work is really, I think, the correct term. There are remote-first companies. I actually think what matters more than where the company is physically located is the cadence by which the work happens, whether it's sync or async. I actually think that's the bigger question that a founder needs to decide, much more than are we remote or hybrid or in the office room?

• 35:22Anthony Pompliano?

  What are the pros and cons of sync and async?

• 35:26Speaker 02

  Oh, I think async fucking sucks.

• 35:30Speaker 02

  Uh, no, I, I, I, look, there's, there's async work. I, I think there's some people that try to run their company like a computer program. And there's a lost element of humanity when you try to do that. I think you can definitely do that when you have like a 35 person company. I think by the time you get to 100 people and then 150 is when you start to not know everyone's name, which is kind of weird for a founder. Like you, right now, if you're a founder and you have 32 people in your company, like you are in total command of everything. You know every single detail and you can sort of run it like it's a big giant document and you can do it in Slack or Google Docs or whatever. And you don't have to have synchronous work. I think, now, I think humans, by their very nature of being human,

• 36:12Speaker 02

  need to feel a connection, need to feel a human connection. And I think that's part of the collective unconscious. It's part of life. It's a meaning of life to, to be with people and to win together and to, uh, by the way, that gets back to the co-founder comment. When you're a co-founder and you win together, it's like winning a battle together, which makes you feel closer to people, which is a, a cycle that repeats itself. And so when you're, when you're working on something hard and you're looking out and you're eating glass, jumping off the cliff into the darkness, when you know that other people are doing that with you, it just makes it a little easier.

• 36:54Speaker 02

  So there's something about working with people, being present, that, uh, at the same time,

• 37:01Speaker 02

  that brings people and I believe creates better business outcomes, not because like we're all collaborating on the idea, but even if you're doing deep work, you need to know that there's other people around you doing deep work too.

• 37:11Anthony Pompliano?

  I don't know if we have, uh, a video that, uh, we're gonna play. They'll play it if, uh,

• 37:16Speaker 02

  Yeah.

• 37:17Anthony Pompliano?

  if we have it, but while we're waiting for that.

• 37:21Anthony Pompliano?

  Rome is this really unique thing where, uh, whether you have multiple offices or people are actually remote, um, you almost replicate the communication structure and, uh, a lot of the different things that you would do inside the office. And I almost call it like a lot of people call it a water cooler talk. I call it kind of bullshitting, but it's actually a really important function in a company. There's like a culture component to it, but there's also, um, an exchange of information. Uh, there's ideas that come from that.

• 37:49Speaker 02

  Yeah.

• 37:49Anthony Pompliano?

  Bringing that into a virtual environment is really hard, right? People don't just like randomly send each other Zoom links and like, yeah, you want to jump in here and just like shoot the shit. And so talk a little bit as to like the product design and how you all think about shipping updates and really kind of listening to customers.

• 38:06Speaker 02

  Well, yeah. So, I mean, let me just quickly tell you a little bit about Rome and what we're doing. So first, Zoom was the first company to really solve the video conferencing technology problem. And if you remember video conferencing before Zoom, it was absolutely terrible. Oh, here we go.

• 38:19Anthony Pompliano?

  Cool.

• 38:20Speaker 02

  So, uh, well, here it is. Um, this is your virtual office. This is your whole company in one headquarters. So you can see, everyone gets a shared view of who's where.

• 38:34Anthony Pompliano?

  Hi, everyone.

• 38:34Speaker 02

  You can jump into different, different kinds of rooms. Uh, obviously we have all this stuff you'd expect, like whiteboards and, uh, but one of the cool things about Rome is there's different types of rooms. That's a theater in the middle. Uh, you can give all hands presentations in the theater. The audio only rooms, which are private offices, are the most popular room format, believe it or not. Seventy-six percent of meetings in Rome are audio only. The average meeting time in Rome is just eight minutes long.

• 39:02Anthony Pompliano?

  Can you repeat that?

• 39:03Speaker 02

  The average meeting time in Rome is just eight minutes long.

• 39:06Anthony Pompliano?

  Why, why is that?

• 39:07Speaker 02

  I think it's because, going back to the Zoom thing for a second, we've all moved to these 30 and 60 minute meetings. And so things that used to take two people five minutes in an office right now are being scheduled for 30 and 60 minute Zooms next week. But if I need to just chat with Pomp about something right now, and I see he's in his office, I can pop over and have that quick, fast conversation with him and we're just done. And that's Not only do I save him time because I didn't calendar him, but I also got the thing done faster because it was able to happen like now as opposed to waiting until I was able to like free him up and he could schedule something and whatever. So we're just back to kind of this fast synchronous work. And we, you know, we clearly made this thing for ourselves and we've been using it, but the velocity at which we are shipping is extraordinary.

• 39:53Speaker 02

  You know, now, if you look just in the past couple of quarters, we can really compete with Slack on chat. We've got integrations. We can, we got something better than Fireflies and Otter, so we can compete on summarization in our, in our group chat with our feature called Magic Minutes, which transcribes and summarizes and then creates a group chat with everyone in it about our, our, about the call. We have a catch me up feature. If you're late to a meeting, bam, you'll get a summary right there with like what, like what you missed that nobody else sees and you can prompt it. You can say, was pomp mentioned? You know, like, you know, in what context was Anthony said?

• 40:28Anthony Pompliano?

  Yeah. So one of the pieces, I think, as I've kind of seen people start to use this product and folks have, you know, shared feedback is that we talk a lot about like shipping culture, right? And shipping a lot of iteration of software very, very quickly. What you all seem to be doing is getting information to go faster inside of an organization. What is the importance of that? Because you're unique in that you're building a startup, right? And I don't know how many people Rome has today, but it's a lot less than Yext had. But you went through the full lifecycle. You've seen running the public company, right? From start to finish.

• 41:02Anthony Pompliano?

  And it almost feels like a lot of the decisions you're making today are specifically focused on not, I'm trying to run a 10% company today. It's, I'm trying to set the foundation to run a public company that's worth billions of dollars and has, you know, thousands of employees.

• 41:13Speaker 02

  I'm trying to give every one of you the foundation to run a billion dollar public company.

• 41:18Anthony Pompliano?

  And just like, why is the information speed so fast and such a big focus?

• 41:23Speaker 02

  You know, when you look at our Rome map, when you're in an office, you get extraordinary signal about what's going on. So if you walk into a physical office, you can see who's there. You can see who's talking to who. You get a sense of people's moods. You can tell kind of the energy level right away. That is all gone when you're on a Zoom that's isolated in a silent. It's all gone when you're on Slack and everyone's just chatting all day. But when you look at the Rome map, you can immediately get sort of a marauder's map for the office. And you get a feeling for who's there, who's talking to who. You can knock on people's door. It gives you this kind of extra signal that you just don't get in a, in a sort of Zoom type, Zoom first, Microsoft Teams first world. And, you know, we also talk to our customers all day long.

• 42:06Speaker 02

  So that's the other thing. Like in, in Rome, you know, we go over, we chat with them, we'll pop over, we'll say hi. And, you know, and Pomp, we didn't talk about this, but I will say we're in closed beta right now and we're going slow.

• 42:21Anthony Pompliano?

  I wasn't going to break everyone's heart that they can't sign up at the moment.

• 42:25Speaker 02

  You can join the waitlist. There's a thousand companies in the waitlist and we're going slow. We have now 263 paying customers. We're getting close to about a million dollars of ARR. But that's not our goal. And I do have some advice for all of you in this, which is don't let your VCs dictate a growth rate. Now, you might kick me for this because you are probably an investor in all the companies here. And you do want to be able to say, hey, you need to grow X. But I just think it's sort of arbitrary. It's like managing the economy centrally to set the, you know, to let a VC set the inflation number or something like that, like.

• 42:56Anthony Pompliano?

  Whoops.

• 42:57Speaker 02

  Whoops.

• 42:58Anthony Pompliano?

  The Fed seems to not be working.

• 42:59Speaker 02

  Yeah. It's like the Fed, the VC is like the Fed, basically setting what growth should be, a growth target. And like, when you work backwards to achieve a growth rate, say, you know, X percent based on where you are, all you're trying to solve for is this like number that the VC said that you have to grow at that speed in order to X. And you will end up doing things that are unnatural, that may not be in the medium and long-term interest of your business. Examples of that are over hiring salespeople or SDRs and pushing companies too hard to try you too soon before they're ready. And, uh, and spending a lot of money on acquisition that's otherwise not worth it. So I, I would just pretty much push back on any, any sort of, sort of working backwards from a growth rate.

• 43:44Speaker 02

  You can only kind of do things naturally. It doesn't mean you don't make smart investments and bets. It just means that building a company is a little. A little bit like building a garden and you just kind of have to do it piece by piece over time and it takes a long time. And you should build something that you want to own forever. And if it doesn't feel right when you hire an SDR, it's just going to spam the world about your brand and potentially undermine you in the medium and long run, just to hit a growth target so that you can raise the next round. You're just playing a different game than building a long-term lasting company.

• 44:13Anthony Pompliano?

  The last thing I want to talk about is fundraising itself. You're a successful founder, whether you like it or not, and so you have an advantage in some meetings, in others you may not. And you've had a lot of experience meeting with investors who gave you money, a lot of investors who told you to kick rocks and get out of their office. Some who have laughed at you and some who love you because you made them a lot of money in the IPO. When you went to fundraise for Rome, what was the strategy and why?

• 44:40Speaker 02

  Well, that was, that was easy because when you've.

• 44:44Anthony Pompliano?

  Yeah, come on, guys, it's easy.

• 44:46Speaker 02

  That was easy. Well, and I'm just being frank with you, like, that was easy because when you've made someone a lot of money before, they typically will, will, will back you again. So I don't, unless you've done that with someone, it's hard to kind of take that as like your strategy. Like, I pretty much just called the person that I wanted to do the deal with. I said, this is the deal. And then, then, and this is something you can do, and I do recommend doing, and everyone is doing this, so it's not particularly a novel idea. But we do have fifty-five incredible founders in the cap table. So use your cap table as a weapon, I think is maybe the advice there, which is you ought to be thinking about who you can bring along this journey.

• 45:24Speaker 02

  Because, you know, and I use the fifty-five people in the cap table that are great founders and CEOs and well-known investors. I like kind of treat them like they work for Rome, you know, and I give them assignments. I say, you do this, you do this, you do this. Hey, can you give me an intro here? And I think that you, you will find a lot of people that are willing to do this. And, you know, there's, there's another thing you can do too, which is make people advisors. But if they're willing to, if they're successful enough, you can get them to be an investor. So I recommend, I recommend trying to build your cap table with, call it, three dozen people that are, that are awesome. And you can do it later on too. If you've started and you haven't done that yet, you can certainly in the next round add a dozen people to it.

• 46:08Anthony Pompliano?

  On this vein, raising a round, especially when you've been a successful founder, you closed the round. The second that word gets out that you closed the round, a lot more people are interested.

• 46:19Speaker 02

  Yeah.

• 46:21Anthony Pompliano?

  Some people will open an uncapped note. Some people will say, thanks so much for your interest. I'll get back to you at the next round. Some people will ignore everyone. What is the strategy that you've seen kind of work best?

• 46:31Speaker 02

  I think it really just depends on your company and what your needs are. I don't think there's a single playbook answer here. If you need to have more capital, you can certainly take it in. If there's somebody you freaking love, let them in an uncapped note. If, and if, if you're set, you just shouldn't spend a lot of time fundraising. Most of your, I really do think people raise too much money. They focus on, you know, on what VCs think as the ultimate end, and that is really not what you're trying to do because the most successful companies are not too concerned about VCs and investors. They, it's an important, but not end all be all part of the game. Raise money from your customers and everything will take care of itself. The most important metric in your company, by far, nothing else matters except net retention. If you have very high

• 47:16Speaker 02

  net retention, that means you have customers that love you. And you know what follows that retention is organic growth. Because when people love you, guess what they do? They tell their friends. And if you create word of mouth and you have people coming to you that have heard of you from a very happy customer, not only are you going to grow through the net retention of the existing logos because people love you, they're going to tell other people and that's going to make your acquisition costs go down. If your acquisition cost goes down, guess what? You can charge lower prices. And guess what? When you charge lower prices, it makes people love you more because you're delivering a higher ROI to them. So this whole thing is like a cycle where if you have high net retention, you get lots of referrals, which in turn lowers your acquisition costs, which you can then pass on to those customers that helped you in the first place in the

• 47:58Speaker 02

  form of lower prices. Win, win, win, win, win. Totally do that. Don't worry about trying to grow at a billion percent just to, you know, just to make VCs happy. Don't raise your prices to grow. Keep people happy. Focus on that retention.

• 48:11Anthony Pompliano?

  Where can people go to sign up for the waitlist?

• 48:15Speaker 02

  Where do they go to sign up? If you want to check out Rome. So.

• 48:21Speaker 02

  Okay, the waitlist is a little bit like-

• 48:22Anthony Pompliano?

  He feels so much pain, he wants everyone to use it and nab this waitlist and he eats them alive and I love watching him suffer up here.

• 48:29Speaker 02

  The waitlist is a little fake. There is a waitlist, there is a waitlist, but I'm gonna just let you in on a secret. When you sign up for the waitlist, actually what you're doing is you're booking a tour. And you're booking a group tour. And this is the cool part about it, this is one little hack that, I don't really know why I'm saying this out loud, but I will. We, we found that when we did one-on-one tours, they're cool. But then we basically started getting too many people coming to us and we didn't have enough people to do the tours. We started doing these group tours. So when you go on a tour, it's a little bit like going on a college campus tour of Rome, where it'll be with a bunch of other people who you don't know. And it really just makes it fun. So, that's what the waitlist is.

• 49:11Speaker 02

  You still are in line, but actually, you join the waitlist by going on a group tour. So, I would encourage you all to check it out and go on one of our fun group tours. It's like going to Disney World, except you can go through the express lane and, and experience the Office of Tomorrow.

• 49:28Speaker 02

  R O dot A M.

• 49:30Anthony Pompliano?

  And, we'll play a little scavenger hunt game. There's a gentleman named John, who I'm not gonna point out, so you all have to find him. He told me beforehand that he will skip everyone to the front of the line if you find him. Which Howard doesn't like, but whatever. Alright, thank you so much, I appreciate it.

• 49:47Speaker 02

  Kick ass.