20VC: Clearbit Founder Alex MacCaw on How To Successfully Negotiate with Investors, What Value-Add Do VCs Really Bring & Why You Should Only Have Operators on Your Board

Alex MacCaw is the Founder & CEO @ Clearbit, the marketing data engine for all of your customer interactions, from customer understanding to prospect identification to personalising every sales and marketing interaction. To date, Alex has raised $17m in financing from some incredible people including Geoff Lewis @ Bedrock, Ash Fontana @ Zetta Venture Partners, First Round Capital, Battery Ventures and then former guest Ilya Sukhar, Naval Ravikant and Josh Buckley. Prior to founding Clearbit, Alex spent time in the engineering teams at both Twitter and Stripe. In Today’s Episode You Will Learn: 1.) How Alex made his way from the UK to becoming one of the hottest founders in the valley with the rise of Clearbit? What does Alex believe is more important mission and vision or organisational discipline? What does Alex mean when he says he started the company as a "vehicle for growth thinking and self-actualisation"? 2.) What did Alex mean when he said, "when you hit product-market-fit, it is time to move into company making"? What does company making mean to Alex? What would Alex like to fundamentally change about the way we manage companies today? When is the right time to make this transition? What needs to be in place to do it successfully? 3.) What does Alex mean when he says, "The 6 Pillars Behind Clearbit"? What elements does Alex think the team should not have full transparency on? How does Alex approach transparency when it comes to fundraising and M&A opportunities? What have been some of Alex's biggest learnings on both delivering and absorbing feedback? What can one do to create an environment of radical candor and rich feedback? 4.) Why does Alex believe that health has to be the #1 priority for every founder? What does that look like in practice? What can one provide the team to encourage this? How does Alex respond to those that might say, "fine but we cannot afford it"? How does Alex suggest there are 3 ways you can become more self-aware as an individual? 5.) What advice does Alex give to founders on successfully negotiating with investors? What value has Alex found that VCs really do bring? What does Alex optimise for when selecting his investor base? What value do most think that VCs bring but they actually do not? When does Alex think one should establish a board? Why does Alex think your board should only have operators and no investors on it? Items Mentioned In Today’s Show: Alex’s Fave Book: The 15 Commitments of Conscious Leadership As always you can follow Harry, The Twenty Minute VC and Alex on Twitter here! Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.

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

• 0:00Harry Stebbings?

  Welcome back to the 20 minute VC and Founder's Friday with me, Harry Stebbings. I would love to welcome you behind the scenes here and you can do that on Instagram at H Stebbings1996 with two Bs. It would be great to see you there. But my word, I'm so excited for the show today. This company makes a tool that I use 10 times a day plus and simply couldn't live without it. On top of that, the founder is a fellow Brit and such an incredible leader. And so with that, I'm thrilled to welcome Alex McCorr, founder and CEO at Clearbit, the marketing data engine for all of your customer interactions, from customer understanding to prospect identification, to personalizing every sales and marketing interaction. To date, Alex has raised over $17 million in financing from some of the very best in the business, including Jeff Lewis at Bedrock, Ash Fontana at Zetta Venture Partners, First Round Capital, Battery Ventures, and then former guests on the show,

• 0:45Harry Stebbings?

  Ilya Sukhar, Naval Ravikant, and Josh Buckley. And prior to founding Clearbit, Alex spent time in the engineering teams at both Twitter and Stripe. But before we dive into the show today, I want to start today with a big shout out to my friends over at ActiveCampaign. With their platform, you can create unique customer experiences that attract, nurture, and convert leads into customers, into repeat customers. Over 80,000 companies use ActiveCampaign to hit their sales targets with intelligent automations that send the right message to the right person using the right method at the right time. If you already have sales and marketing tools you love, keep them. ActiveCampaign will work with them and give you automations to make them even better. ActiveCampaign is the first customer experience automation platform, helping you provide personalized and optimized customer experiences.

• 1:28Harry Stebbings?

  You can get your second month free and two free one-on-ones when you go to activecampaign.com/20vc. That's activecampaign.com/20vc. And speaking of crafting unique customer experiences, you know when you go to a website and there's just one thing you want, it should be simple, quick, friendly even. That's Intercom's motto. So Intercom makes that little chat bubble in the corner of a website, opening your business up to customers in quick and friendly ways. But it doesn't stop there. Intercom extends your team with conversational bots and guided tours inside your product. Take Intercom's success story, Unity. Before using Unity, visitors kept abandoning their site. The Intercom Messenger helped Unity get proactive with their visitors in just 12 months within Intercom, Unity got forty five percent more customers.

• 2:12Harry Stebbings?

  Give your customers the one thing they're looking for and get your best revenue channel yet. Go to intercom.com forward slash podcast, then see everything else Intercom can do for you. We've heard quite enough of my dulcet tones now, so I would love to dive into the show with Alex McCaw, founder and CEO at Clearbit.

• 2:34Speaker 01

  You have now arrived at your destination.

• 2:37Harry Stebbings?

  Alex, I mean, my word, it is such a pleasure to have you on the show following what's been an incredible two years with Clearbit. So thank you so much for joining me today, Alex.

• 2:44Speaker 02

  Well, thank you. It's a real pleasure to be here.

• 2:47Harry Stebbings?

  Well, I would love to kick off today with a little bit about you. So a fellow Brit, incredibly exciting for me to have on the show and one of the fastest rising founders in the valley with Clearbit. So how did you make your way into startups and come to found Clearbit? What was that aha moment for you, Alex?

• 3:00Speaker 02

  Well, I think startups have always been ingrained in me. My father is a lawyer for Gillette for thirty years. And as he got ready for work every day, he would say, you've got to be your own boss, Alex. So I think he ingrained it in me from a pretty young age. And I've run various businesses over the years and I moved to the States about ten years ago. And I initially worked as an engineer at Twitter and Stripe. You know, they don't actually let you start a company without actually working for a few companies. And then when I got my green card, I started Clearbit.

• 3:27Harry Stebbings?

  Absolutely love it. What was the reasoning behind starting Clearbit over the plethora of other options in terms of this problem set?

• 3:33Speaker 02

  So most founders will give you some elaborate story about some founding story. I'm not sure I have a single aha moment, but I do remember just being enamored by the data space. You know, everything we do ultimately flows back to data. And as humans, we just seem to be compelled to create it. And I just wanted to be in the thick of things and I wanted to start a company that would really push myself and see what I could become, basically.

• 3:58Harry Stebbings?

  I I love that in terms of seeing what you've come in. It reminded me of something you said to me before, which is really founding Clearbit was more a process of like self naturalization. And we actually had Mathilde at front on the show and she said, ah, this whole mission from day one, in many ways, it's kind of BS. Organizational discipline is way more important to look for, she thinks. Would you agree with her in this thought process?

• 4:17Speaker 02

  Well, the beauty of different founders and different. Companies is that there's so many different flavors of success, you know, it really just comes down to founder and the motivations. A lot of motivated by external validation, like money, status, or having an impact in the world. And to be clear, there's absolutely valid motivations, but then just not really mine. And as you alluded to, I actually started this company as a tool to self-actualize. So there are a lot of ways, maybe healthier ways of self-actualizing, like meditation and therapy, but a company is a fantastic way of pushing yourself and setting up this feedback loop that you really need it for self-growth. And I ask everyone at Clearbit to think of the company as a self-growth vehicle. And for the record, I actually totally agree with Matil that operational excellence is key to scaling.

• 5:01Speaker 02

  And we were lucky enough to get a lot of coaching early on in the days of Clearbit to actually make Clearbit operate extremely well.

• 5:08Harry Stebbings?

  Totally. I mean, I completely with you in terms of the operational excellence. I'm interested though in terms of the vehicle for growth thinking, especially maybe applied to the team. How do you think about and assess that speed of personal growth and whether one has the capability and desire to do so, really pre-hire in the hiring process? How do you think about that determination?

• 5:25Speaker 02

  Well, usually it's quite obvious if candidates are interested in self-improvement because they ask about it. They ask about our values, our culture, how we do feedback. But I do believe that frankly, interviews just don't cut it. You know, the only real way we found of evaluating candidates is through references and back channels.

• 5:42Harry Stebbings?

  But I'm totally with you in terms of the heaviness and weight of references. But if we stay on the element of the company as a vehicle for growth. And we chatted before, you said to me, when you hit product market fit, it's time to move into the company making phase. So I guess what does company making really mean to you? And does this not happen from day one?

• 5:59Speaker 02

  At its essence, company building is building the machine that builds the machine. So it's scaling up the company while ensuring that communication and culture doesn't go to shit. It's a real art and a rare one. And I think that's why you see founders who've demonstrated they've done it before. They've just come on such huge valuations, the next company they build, because it's such a rare talent. And for first time founders, it's a really tricky transition. You have to change how you think about your time, how you think about hiring. You have to start dealing with human problems rather than bits and And I actually think it's really difficult, especially for technical founders. Well, it certainly was for me. You've had your head down this whole time, building, building, building. And now you stick your head up and you realise the company needs a real CEO, but you have no idea where to start.

• 6:43Speaker 02

  And I was exceptionally lucky to have coaching from this guy called Matt Mashari. And he came in and he held us early on when we were about twenty five people or so, and now we're about a hundred. But he taught me the love of company building and the love of management. And operations and management are the unglamorous side of company building, sure. But after product market fit, they are the difference between success and failure.

• 7:05Harry Stebbings?

  Can I ask you a very maybe blunt and naive question, which is like absolutely for serial founders who've been there and done it before and seen the mistakes they made the first time. You didn't have that hindsight. So was it a difficult learning process for you in terms of that company making phase? And how did you really get to grips with it, given you hadn't had the hindsight?

• 7:21Speaker 02

  You know what my secret weapon is? Is I ask for help. I don't have any problem asking anyone in the world for help. And the great thing about Silicon Valley and the world in general is that people really do help you. I think Matt Mashari helped us in the early days and he didn't charge us a thing. So it was really down to the people out there who were standing on the shoulder of giants who helped us and coached us and made us what we are today.

• 7:44Harry Stebbings?

  I mean, I totally agree in terms of the asking for help and it's always what I did in the early days and still today. I do want to also dive a little bit deeper into the management and really kind of construction of the machine. Because you described it before as the six pillars behind Clearbit. So I love this in terms of the structure and I want to take it turn by turn. So if we start with the first pillar, what is the first pillar here?

• 8:02Speaker 02

  Sure. So the first pillar is people. And so clearly hiring the right people is important. I mean, I think that's obvious. I think what is less understood is that eighty percent of the work of management is actually done upfront by hiring the right people. People who are interested in self-growth and self-improvement. People who match the jobs to be done. People who are fairly self-managing, who you can trust that whatever they say they will get done, gets done.

• 8:25Harry Stebbings?

  Totally agreed with you in terms of the time upfront. We had a discussion on the show about Patrick Collison and Collison's emphasis on, you know, meeting many, many, many in terms of people in the existing role that you're looking to hire for, to really determine what great looks like. Is that a sort of process that you? You look like in terms of hiring for roles that maybe you're not akin or used to as a technical founder, hiring marketers, for instance. How do you think about hiring for roles which aren't akin to your maybe natural skills?

• 8:50Speaker 02

  So what I'll do when I'm hiring a senior role is I will go out and meet the best people in the industry. You know, right now we're hiring a COO, Chief Operating Officer. And during the search, I've spoken to some of the best COOs on the planet. Last week I was chatting to Adam Bain about it, who was like CEO of Twitter. So that really actually lets you choose what excellence looks like. And then when it comes to candidates, I think the key thing is sourcing. It's like the number one thing because if you don't have enough candidates in the funnel, as you go down, you start compromising. And you're like, ah, we need to fill this role. We haven't found the perfect person, but let's hire them anyway. So the key thing is that sourcing upfront.

• 9:30Harry Stebbings?

  How do you think about keep building the candidate pipe there? Is it something you do manually? Do you work with recruiters? How do you think about getting the best candidates in pipe?

• 9:37Speaker 02

  I'll tell you our secret. And this is something that sounds, maybe sounds obvious in retrospect, but we didn't do it for a long time. And when we started doing it, our business transformed. So the secret is sourcing sessions. Sit down with your engineers or whoever is relevant for the role and then use tools. There's tools like Teamable or you can just go through that LinkedIn and use LinkedIn Recruiter. You've literally just got to sit them down because sourcing is so boring. It's so boring. Everyone hates it. So you, you literally have to, people are not going to go through their network themselves. So you sit them down and you do this every now and again, and you also do this with all your new hires as well. And that is the best way of growing the business.

• 10:17Harry Stebbings?

  I love that in terms of kind of the instilled discipline around structure of that. I do want to move on to the second pillar though. What's the second pillar?

• 10:23Speaker 02

  So really autonomy is the secret to a happy team and treating people like adults, trusting in them, delegating. Your team should be making decisions and driving things, not you.

• 10:34Harry Stebbings?

  In terms of like them driving things and the accountability around that, how do you think about the accountability? And then also kind of goal setting and setting ambitious enough goals that they're really hard to get. But then also not too hard that if they don't get them, they're disincentivized. How do you think about the balance and structure of kind of? KPI selling associated to morale.

• 10:52Speaker 02

  You know what we do is the leadership team gets together and will figure out the company OKRs at the start of the year. We actually have the same OKRs the whole year and that includes the revenue number, but it also includes another other things that we're working towards. And then let's just say we look at marketing OKRs. Matt, our CMO, will take those company OKRs and he will show them to his team and they are the ones that come up with their own OKRs. And sure, Matt approves them, but the key thing is to get people involved and making the decisions as to their own targets.

• 11:25Harry Stebbings?

  No, I love that in terms of them feeding the ownership around it. Okay, next one. What's pillar three?

• 11:30Speaker 02

  Transparency is our third pillar. To be clear, we are transparent in all areas by default, aside from compensation and performance. It builds mutual trust, it lets us draw from the wisdom of the crowds and lets us operate more efficiently. Transparency is key.

• 11:44Harry Stebbings?

  Totally with you on transparency being key. I did have Jeff Seibert on the show before and he mentioned actually an interesting element though, which I don't think many maybe think about, which is especially in fundraising and exit situations. How do you think about transparency in those situations, especially in fundraising, for example? You know, morale can be dampened when it takes longer or if they see a lot of investors coming in or a lot of meetings happening and then no funding happening. How do you think about transparency around those classic financing events?

• 12:09Speaker 02

  It's a tricky balance. I think what you have to be wary of is distraction. So you should be transparent, but giving people the minute by minute, play by play updates of the funding round is just going to distract them. So the balance that we got in our last funding round was we just had every couple of weeks I would do an update to the company. And in that update, I was very transparent. I'd be like, this is going well, this is not going well, this is what investors care about, this is where we can improve. And I think that's the right cadence for fundraising.

• 12:39Harry Stebbings?

  Okay, next one. Let's hit it. Number four.

• 12:42Speaker 02

  Okay, so feedback. We have a culture of giving and receiving feedback and I crave feedback. It's a gift. I've found it's the only real way to grow. I'm not objective enough about myself to grow without it.

• 12:54Harry Stebbings?

  So agreed in terms of feedback being a gift, can I ask, what do you do internally to create an environment where people feel safe enough to give maybe raw, unvarnished feedback, which in most cases is the most constructive? Is there anything that one can do to make people feel open enough to share to that extent?

• 13:09Speaker 02

  You know, there's a real skill to giving and receiving effective feedback and we could do a whole podcast about this. Fundamentally, there are two steps and I recommend reading a book called Radical Candor on this. The first step is you need to have a real, genuine relationship with each other, such that the person you're giving feedback to really trusts that you have their best interests in mind. So you've got to have that real, genuine relationship. The second is that you need to be absolutely candid. State the facts, state the story in your head. Don't sugarcoat things to make people feel better. You're just doing them a disservice by watering down the feedback. That's what I see the most is managers operating in what I call ruinous empathy, where they sugarcoat their

• 13:51Speaker 02

  feedback or don't give it because they're afraid of upsetting people. Really, you're just hurting them if you do that.

• 13:56Harry Stebbings?

  Can I ask, and this is maybe a little bit personal, so do say so if so. Have you ever struggled with being a people pleaser? It's something that I definitely struggle with and trying to change. Have you ever struggled with it and do you see it in the team? And how do you kind of advise and think about really losing that desire to please people?

• 14:11Speaker 02

  You know, I haven't. Have you ever heard of Enneagrams?

• 14:15Harry Stebbings?

  No, I haven't.

• 14:16Speaker 02

  They're a type of psychological test and we recently just done them in the company and I'm an Enneagram eight, Wing seven. And it's a really good way of understanding yourself. I recommend you do it, especially if you're trying to work on that. I'm not sure that you have to try and change fundamental pieces of your character like that. I would just try to meld them into whatever you want to do in life. But yeah, I'm eight, so eight is the challenger. So eights are less worried about external validation or people pleasing.

• 14:43Harry Stebbings?

  Got it. No, listen, I'm going to do the test for sure. I'm going to send you my results. I do want to discuss the next one then. I'm super passionate about this one. So what is the next one? Talk me through it.

• 14:52Speaker 02

  Health. So health is number one. And I think the issue with the idea of work-life balance is it really implies the two diametrically opposed. I prefer the idea of work-life harmony, where you look at everything holistically. And this means at Clipit, we have really healthy lunches. We actually have two full-time chefs, because people just pick the default. If there's shitty food in front of them, they'll pick it. We offer gym stipends. We offer therapy for everyone. We offer the best health insurance. We have on-track vacation. You can work from anywhere. We don't track or care about the time of the seat. But it's really, I think, health is really about amalgamating it into your work-life harmony. It's got to be integrated into everything.

• 15:33Speaker 02

  You'll see, people at Clipit, they will leave the office in the afternoon to go to the gym, because it's a lot more convenient to them. And it means that if they have that habit every day, then they're going to be healthier.

• 15:43Harry Stebbings?

  I totally agree. And a healthy team is a happier team and a more productive team. I guess kind of the question for me is, a lot of founders who maybe would hear this would say, that's great, but I can't afford it. What would you say to them who say, I can't afford the gym stipend? I can't afford the healthy food. How would you advise them?

• 15:58Speaker 02

  Well, I would say, as for fording it, I don't think you can afford not to. Health was a priority from day one. It has to be. As a founder and CEO, you have to look after yourself. You need to be exercising every day, and you need regular therapy. I think when you, as soon as you raise a round, let's just say you're a seed founder, you're struggling at the start, and maybe you're finding ways of being healthy, like going for a run or trying to eat healthy. But as soon as you raise the first round or you get to profitability, then put a personal trainer on the company card, put an exec coach on the company card, put a therapist on the company card. These are absolutely legitimate expenses, and you should be spending company money on this stuff, because if you're in tip-top condition, then the company's not going to work.

• 16:42Harry Stebbings?

  Yeah, listen, I agree with you totally. I guess the final one on this that I do have to ask is, as a VC founder, I've seen some VC offices that do have the most incredible gyms in them, and still people don't use them. How do you incentivize people to really actually take advantage of the gym stipend, the therapy, not feel maybe bad for using it or maybe vulnerable in doing so? How do you encourage that sort of atmosphere?

• 17:03Speaker 02

  Well, the the old adage is you can lead a horse to water, but you can't make a drink. So there honestly, there is only so much you can do. You can put it in front of people. Or you can have healthy defaults to set a good example. One thing I have found that does work is games. So Clipit has a softball tournament. Also, Clipit does boxing as well. So having these group activities actually brings out people who perhaps normally wouldn't.

• 17:27Harry Stebbings?

  Totally. No, I agree. I think the competitive element will always drive a lot more participation. Okay, next one. What's the next pillar, Alex?

• 17:33Speaker 02

  Well, the last one is is management. So most companies and most companies our size, they just don't put much thought into management and training, which I think is a complete travesty. You know, I can't emphasize enough how important management is. At most companies, people join and it's just it's complete crap shoot as to if they get a good manager or not. And that affects their entire experience at the company. Then they leave the company. People don't leave companies. They leave managers. So we put so much thought into management training. And we've got actually a whole handbook that we've written internally. And we do regular management trainings. And we are trying to get to a place where Clipit has world-class managers.

• 18:13Harry Stebbings?

  I love that in terms of the focus on management. I guess the question there is, I've seen too, kind of how poor onboarding can be. How do you think about structuring your onboarding to be as optimal as possible?

• 18:22Speaker 02

  You know, I actually got the feedback last week that our onboarding was pretty bad too. Which is kind of sad, but now I know, which is great. So I can fix it. My approach to onboarding and the current system is that we just get people to read. So the first couple of days is just reading. And there's like an Asana checklist and people go through and read. And it is a very efficient form of data transfer. But what I've just realized is that it's great for Alex McCaw, not so good for everyone else. Because not everyone learns that way. And so we're gonna mix things up. We're gonna have some more videos in there. We're gonna have some in-person talks. But I'm not sure if nail onboarding yet at Clipit.

• 19:02Harry Stebbings?

  Well, I mean, listen, thank you so much for being honest. It's not a trait that's always so prominent on the show. But I do wanna ask, one specific element in particular of management, which is the kind of rise of conscious leadership. What does conscious leadership mean to you? And how do you look to imbue it today with team?

• 19:17Speaker 02

  Honestly, conscious leadership is the best way I've found of living life. So I think the easiest way to explain it is to talk about the simple model. So there's this line, and at any moment in time, you're either above the line or below the line. And when you're above the line, you're open, curious, you're committed to learning, you're actually in a sense of trust, able to trust yourself, able to trust the environment, able to trust your relationships, and be able to trust the universe. You can trust wherever you're placing your trust. And when you're below the line, you're contracted, you're in a state of threat. Your literal body posture can be closed, your heart is closed, you're defensive. And the big idea is that you're attached to proving that you're right. So what I'm simply saying is that the first key skill of conscious leaders

• 20:00Speaker 02

  is self-awareness. And the first act of self-awareness is can I locate myself in this now moment? Am I open or closed? Am I in the state of trust or the state of threat? Because we believe the ability to locate yourself really does start this powerful conversation inside of yourself, and with anybody else you're doing this work with.

• 20:18Harry Stebbings?

  Can I ask, I actually had Clark at Envision on the show very, very recently, and we spoke a lot about self-awareness and how to increase it. He spends time specifically everyday journaling with different segmented thoughts that he has and continues to have. How do you think about proactively increasing self-awareness, and anything that you do in particular?

• 20:33Speaker 02

  So I think there are three ways you can grow in self-awareness. One is to become more self-reflective. And a great way of actually stimulating this is through meditation. But actually pause and bring almost like a lens of attention back at yourself, as if there was something outside of you looking back at you. The other way to grow in self-awareness is some kind of instrument, and I mentioned the Enneagram earlier. I like that one, but there's a few technical instruments like the Myers-Briggs test, for example. And the third way, and my favorite way, is to set up this incredibly feedback-rich environment, where the people around you, the most direct form of feedback, are giving you feedback all the time and helping you grow.

• 21:08Harry Stebbings?

  Totally agree in terms of that growth. In terms of when maybe the self-awareness isn't there, often it kind of results in this lack of trust. What have you observed happen when trust does deteriorate? In relationships and in teams, what was the consequence?

• 21:20Speaker 02

  It spirals. Trust is all we have to bond us together. And it's quite frankly, as soon as trust dissipates, you can't work together.

• 21:27Harry Stebbings?

  Okay, interesting question here. Do you start from a full relationship of trust? Or do you believe that trust is gained in increments? And you start from nothing and it's gained, or you have it all and it's there to be lost, so to speak?

• 21:38Speaker 02

  You have it at the start because there's been a lot of pre-vetting through the interview process. You know, there's been a lot of fact channels and reference checks. So you start off with that place of trust. If you lose it, it's hard to regain. But the great thing about having regular feedback, and we do feedback in our one-on-ones every single week. This is bi-directional feedback, is that if there's any chips to that trust, they get resolved rather than spiraling. Does that make sense?

• 22:02Harry Stebbings?

  Totally makes sense. Absolutely, it does. I do want to move into a very kind of interesting and out there segment, which I tried to tie into the theme of the six pillars, and then I realised that it was absolutely not possible. And so I kind of called it Alex's Ask Me Anything. And so I spoke to quite a few of your ambassadors before the show, in terms of Jeff Lewis, in terms of Ash Fontana, and I want to talk a little bit about fundraising and VC interactions. So I want to start, if we take it a little bit like a funnel, starting pre-deal. I heard from Jeff Lewis that you're the master when it comes to negotiating with VCs. So what advice would you give on successful negotiation with investors, Alex?

• 22:36Speaker 02

  Yeah, I'm gonna preface this. This is a little bit of contrarian advice perhaps. And I have a slightly different take to the whole thing than other founders. And I'm not saying I'm right. I'm just saying this is what's worked for us. So the first thing to realise, the VCs are professional salespeople. That's all they are. They're salespeople that sell financial instruments. And the best advice I have is the same for any negotiation. If you can't walk away, you have no leverage. So get profitable. It's the only way you can walk away.

• 23:05Harry Stebbings?

  Can I ask, can you manufacture leverage?

• 23:07Speaker 02

  You can, but people can sniff it out. VCs are professional negotiators. They do this every day. They little know when you're bullshitting. The second piece of advice I have for negotiating with VCs is to stop caring about external validation. So stop caring about the glamour, about the big name VC. None of it matters, in my opinion. You're simply trying to sell a piece of your company for the cleanest possible terms at a reasonable valuation.

• 23:33Harry Stebbings?

  Can I ask, in terms of that, because after our first episode on Sasta, I had so many VCs post that and for the continuing months being like, Do you know, Alex, I'm so excited by Clearbit and you're round and Clearbit is such a popular asset with VCs. How did you think about the investor selection there? Was it the deal mechanics?

• 23:49Speaker 02

  It was definitely terms and valuation definitely came into it. We wanted the cleanest terms. But obviously, someone on your cap table is extremely hard, if not impossible, to remove. And you have to be very careful with who you add to it. So yes, there was a lot of back-channeling references, a lot of dinners. But really, I didn't care at all about people's brand or what other people would think. Not one single IBOJ.

• 24:13Harry Stebbings?

  Does it not help with hiring?

• 24:15Speaker 02

  Egotistically, I feel like I don't want those kind of candidates about whether Benchmark or Sequoia invested. It may help with some of the senior hires, but we really haven't had a problem.

• 24:25Harry Stebbings?

  In terms of like post-deal though, from your personal experience, what value have you found that VCs can bring?

• 24:31Speaker 02

  Well, I think we're a very special case in that I tell our VCs that I actually don't want much help from them. If I want a recruiter, I'll pay for recruiter and they'll be a better recruiter than that VC because they're full-time. If I want a COO, I'll pay for a COO. If I want advice, I'll pay for advice from people who've got that industry experience, you know? So I don't actually expect much help from our VCs.

• 24:53Harry Stebbings?

  Can I ask, and a weird one, but do you think we'll see the unbundling of VC into kind of segmented products like Navarre Avocans maybe said before?

• 25:00Speaker 02

  I think it would be great if we just had a fund that was called Just Money. And yeah, and it would just give you the money. Everything else, you can buy. You can buy recruiters, you know? Honestly, we have had no candidates through our existing investors, all through other investors, aside from actually, I can think of one. So yes, I do hope we will see the unbundling of VCs and I love seeing things like Indie VC come along and trying to disrupt the system.

• 25:26Harry Stebbings?

  Yeah, totally. No, I think what Bryce is doing is awesome. I do want to discuss the other one, which is boards. You don't have a large board at Clearbit and you have no investors on the board, which is unusual. So what's the thinking behind this and what are the pros and cons?

• 25:38Speaker 02

  Well, here's my thoughts on this. So actually, your previous guest, Josh Buckley, is the only other guy on the board, only other person on the board. And the reason is, I think at our stage, a board is just a lot of busy work. At some point, boards have their place, absolutely, but only when packed with operators rather than investors. So we will set up a board and I'm planning on doing it next year, but we're gonna add more operators to it rather than have any investors on it.

• 26:04Harry Stebbings?

  Got it. Absolutely. Do you think that's a right time to establish a board for founders listening? Do you think that's a right time where actually board installments should be a priority?

• 26:11Speaker 02

  Definitely not for the seed. I would just raise the seed on all safes. For the A, try not to add to the board. And then maybe the B, often you just don't have a choice. A lot of investors will require being on the board. There's kind of a luxury having the choice, but I would say B onwards seems like a good time.

• 26:28Harry Stebbings?

  Sure. Absolutely. And final one, and it's kind of board are a form of support mechanism, but Ash Fontana at Zeta actually asked, how did you construct a support network around you as a CEO and what really worked for you?

• 26:39Speaker 02

  So, I mean, Ash has been great and been talking me through a lot of the issues. We just casually meet for lunch every now and again, but when it comes to my advisory group, what I've done is I got six CEOs and ex-CEOs to invest in the company and they became my advisory board. And so what I do is I email them and meet with them fairly regularly and they provide absolutely brilliant advice.

• 27:01Harry Stebbings?

  Love it. I think that's such a good way to get a mutual bind and really different. I haven't heard that on the show before, but I do want to move Alex into my favorite, which is the quickfire round. So I say a short statement and you hit me with your immediate thoughts. Are you ready to rock and roll?

• 27:13Speaker 02

  Let's do it.

• 27:13Harry Stebbings?

  Okay. Favorite book and why? You love reading the documentation. What should we be reading?

• 27:17Speaker 02

  You know, my favorite book goes back to what I was talking about earlier. It's called The Fifteen Commitments of Conscious Leadership. And it is the book behind the whole principles of conscious leadership. And it just drastically changed my outlook on life.

• 27:31Harry Stebbings?

  What advice do you know now that you wish you'd known at the beginning of your time with Clearbit?

• 27:35Speaker 02

  Don't be penny wise and pound foolish. Now, invest upfront in customer success and sales. You know, they work. I took way too long hiring out those teams and hurt us for a while.

• 27:45Harry Stebbings?

  What do you want to change about the way that people think about managing companies through your upcoming book?

• 27:50Speaker 02

  So we are actually publishing a book on management and we're actually just publishing our internal book, really. Fundamentally, what I want to change is the way that people run companies. Right now, the default, they're running companies from a place of authority and fear. And I want to change that to a place of love and vulnerability. And that's obviously a big ask. So the book is a very tactical way to provide a lot of practical management steps along the way.

• 28:14Harry Stebbings?

  Can I ask a difficult one? Does love and vulnerability scale as a core ethos and theme for a company when it's a thousand person company?

• 28:21Speaker 02

  That's a very good question. Um, I guess we will see.

• 28:26Harry Stebbings?

  Tell me, I know that you're a fiend on the DJ decks. What do you love about DJing? And is there anything that's applicable to startups and CEO shit?

• 28:33Speaker 02

  Again, this may be a little contrarian, but two reasons. I love getting to play my own music at parties. And the second is as an introvert, it's a socially acceptable way for me to be at a party and not talk to anyone and just be in the corner configuring a giant circuit board.

• 28:50Harry Stebbings?

  I love playing my own music too, but people tend to turn off when they hear Westlife. But uh, yeah. Final question, what's the biggest challenge with your role with Clearbit, Alex? Honestly, because you can look at it and, you know, I have done before. And it does look all up and to the right. What's the challenge for you?

• 29:04Speaker 02

  It's definitely scaling culture, keeping what's special here. We built a really, really special place that people love getting to work, you know, what coming into work at. Someone last week told me it was the best job they've ever had and that just made my week. So really keeping that as we grow, that's the hardest part.

• 29:21Harry Stebbings?

  That's a very special thing to hear though. I do want to finish it, Alex. On the next five years for you and for Clearbit, what's that exciting roadmap ahead?

• 29:28Speaker 02

  Well, golly, it's hard to tell. I can barely tell what next year is going to look like. But I would say success for me would be if the company was public in five years and the most people working in the company felt like it was the best job they'd ever had.

• 29:41Harry Stebbings?

  Alex, as I said before this episode, I've been so looking forward to this one for a very long time. Thank you so much for joining me again. It's been such a pleasure.

• 29:48Speaker 02

  Thank you. I really appreciate it.

• 29:52Harry Stebbings?

  If you couldn't guess from that episode, I'm such a huge fan of both Alex and Clearbit and couldn't be more excited for the times ahead. I would love to invest in that product, Alex, and let me know when that is possible. And if you want to see more from Alex, you can find him on Twitter @McCaw, that's @McCaw. Likewise, I want to say huge thank you for tuning in. If you want to see more from us, you can also check us out on Instagram at HStubbings1996 with two Bs. However, before we leave you today, big shout out to my friends over at ActiveCampaign. With their platform, you can create unique customer experiences that attract, nurture, and convert leads into customers, into repeat customers. Over 80,000 companies use ActiveCampaign to hit their sales targets with intelligent automations that send the right message to the right person using the right method at the right time. If you already have sales and marketing tools you love, keep them. ActiveCampaign will

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• 31:18Harry Stebbings?

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