Lessons from scaling a fast-growing distributed team at Zapier

05/29/19 • 40 min

Ryan and Wade Foster have known each other through the internet for years before recently meeting in person in Mountain View. Ryan learned so much from the coffee chat that he asked if Wade would join the podcast to share some of his stories scaling Zapier. Like Product Hunt, Zapier is a fully distributed team, although they're much bigger with 200 people in over 20 countries. They're helping makers create no-code apps and helping everyone get work done more efficiently.

Ryan and Wade talk about...

Learnings from scaling a distributed team and Zapier's “delocation package”

“We went through YC in summer 2012, and for the summer all three founders worked and lived together. That was the only time period in our company’s history where everyone was in the same location.”

Zapier is a very large distributed team, with over 200 people working completely remotely. They've only worked together one time in their history, when the founders were all at YC together in 2012. Wade talks about some of the benefits to working in a distributed team, including the fact that he has “effectively a teleportation machine” that can transport him from meeting to meeting in seconds by taking calls via Zoom, instead of having to find an open meeting room and switch between physical locations.

Zapier came up with a unique “delocation package.” As a distributed team, they offer people living in the Bay Area $10,000 to move out of the Bay Area, which a few employees have taken them up on so far.

Wade talks about how they make sure that everyone is on the same page in a fast-growing, distributed team:

“A big task that you have to do as you get bigger, is alignment. Alignment is simpler when there are fewer people. When you get bigger, you can do a lot more, which is exciting, but good smart people can pick different paths to go down, which don't necessarily solve for the customer's needs. The last 18 months we’ve worked really hard to create an OKR system that creates alignment across all these different teams.”

Managing team dynamics in a fast-growing organization

Wade talks about how managing a big team is different than a small team, and why CEOs need to pay attention to how the team is working together and how everyone is feeling about their work.

“The larger your org gets, the law of large numbers kicks in. If, say, 1% of your company is angry about something in a given day, you get to 200 people that means every day 2 people might be pretty angry about something. If you make a mistake, maybe 5-10 people are pretty angry about something. For someone who’s a natural people-pleaser, that can wear on you.”

Wade explains why it can be difficult to hire from within in a company that is growing exponentially.

“If the needs of the company outpace the needs of the individual, which is often common in these companies that are growing exponentially, there are very few people who can rise through the proverbial management ranks fast enough to match the growth of the company.”

What it's like to be CEO and the “cheat code” that CEOs get to keep in their back pocket

“CEOs get a cheat code, which I think is fair because CEOs have a crazy hard job in so many different ways. We get to hire people. If you feel like any function isn’t being successful, you get the opportunity y to go hire the best leader you can possibly find in the world. As a CEO, your job is to assemble the best team and so if you do your job right you should probably be the dumbest person in your executive team to a degree.”

Wade also talks the system he adapted from Dharmesh Shah at HubSpot to denote how urgent his communications with the team are (or aren't). They have a set of hashtags that Wade uses alongside his emails and Slack messages to make clear whether urgent action is required or not. Sometimes employees feel that any email from the CEO means action needs to be taken right away but this system ensures everyone is on the same page.

His thoughts on the no-code movement

“If you’ve got an idea and you really aren’t an engineer, you can get something up and running that is pretty good in a couple hours. I think it’s just fantastic because it allows many more people to get their ideas out into the world.”

Zapier is a big part of the no-code movement and Wade and Ryan talk about some of the coolest projects they've seen built by makers without writing code and some of the products being used alongside Zapier in the no-code movement.

“I imagine we’ll find that more and more companies are built with off-the-shelf software, which feels pretty powerful for society to enable the 99% of us who are not engineers unleash our creativity on the world.”

Joel also talks about some of this favorite products and the software the company uses to collaborate.

We’l...

Ryan and Wade talk about...

Learnings from scaling a distributed team and Zapier's “delocation package”

Wade talks about how they make sure that everyone is on the same page in a fast-growing, distributed team:

Managing team dynamics in a fast-growing organization

Wade talks about how managing a big team is different than a small team, and why CEOs need to pay attention to how the team is working together and how everyone is feeling about their work.

Wade explains why it can be difficult to hire from within in a company that is growing exponentially.

What it's like to be CEO and the “cheat code” that CEOs get to keep in their back pocket

His thoughts on the no-code movement

Joel also talks about some of this favorite products and the software the company uses to collaborate.

We’l...

Previous Episode

Distributed teams, extreme transparency and buying out your investors

On this episode Ryan is joined by Joel Gascoigne, CEO of Buffer, a simple tool manage all your social media accounts. We've been avid users, big fans, and paying customers for years.

In this episode Ryan and Joel talk about...

Joel's roundabout journey from the UK to the US via Hong Kong and Israel

Joel started Buffer with his co-founder in the UK. They lived only thirty minutes away from one another but worked remotely most of the time, preferring Skype calls and chats. After moving to the Bay Area, they ended up having to leave the US because they weren't able to get visas. He tells the story of how they decided where to go next.

“We were unable to get our visas, so we had to leave the US. I remember the three of us in an apartment in San Francisco looking at Google Maps, thinking ‘where should we go?’ We ended up going to Hong Kong for six months and then to Israel for three months.”

What it's like to manage an 85-person completely distributed team

“David Cancel, who’s at Drift now gave me really good advice. He said either go fully remote or have an office with everyone in the same place. He said it’s hard to make it work when you’re in between those two scenarios.”

Joel talks about the advantages of a distributed team, including why distributed workers tend to have more loyalty and retention with a company than Bay Area employees. He also gives his advice for setting up and running a distributed team.

“We actually went out of our way to hire the next few people outside the Bay Area just to makes sure we were really distributed and not ending up with people who felt like second-class citizens.”

Buffer's extreme transparency and how that endears the company to its customers

Joel is one of the most vulnerable and open CEOs you'll find. He talks about how he started writing on the company blog about all the highs and lows that Buffer was experiencing and how it benefitted the company in ways that you might not expect. Buffer also publicly shares their formula for determining salaries as well as the salaries of every individual in the company. Joel explains how this is empowering to employees.

“It’s just fulfilling and liberating to open up and share. I feel like it keeps us honest and doing the right things.”

He says that transparency made the company more human and that both customers and non-customers felt like they were “along for the ride” when they could learn about the interior workings of the company.

[When facing scaling challenges and angry customers] “...we would try to be very responsive on social media and email. When you’re sharing things transparently, you’re building up that trust with customers and very quickly those situations turned around into overwhelming support from customers — and even non-customers, just people cheering us on as a company.”

Why (in a very unorthodox move) Buffer bought out their investors last year

Joel explains their unique approach to company-building. He talks about how they broached the topic with their investors that Buffer might not be seeking the typical VC exit — and how they found VCs willing to partner with them on those terms.

“We shared in the negotiations that there was a good chance that we might never want to sell the company or go public.”

Of course, Joel also talks about some of his favorite products as well.

We’ll be back next week so be sure to subscribe on Apple Podcasts, Google Podcasts, Spotify, Breaker, Overcast, or wherever you listen to your favorite podcasts. Big thanks to Pilot and Monday.com for their support. 😸

Companies and Products Mentioned In This Episode

Discourse — Civilized discussion for your community.

Superhuman — The fastest email experience ever made.

Threads — Empower your team to discuss and make decisions at scale.

Next Episode

Secrets of Sand Hill Road with a16z's Scott Kupor

Scott Kupor joins Ryan on this episode to talk about his new book, Secrets of Sand Hill Road. Scott is Managing Partner at Andreessen Horowitz and has been at the firm since it was founded. He has a long history with Marc Andreessen and Ben Horowitz, including working alongside them at Opsware in the early 2000s.

Ryan and Scott talk about...

How venture capital has changed over the past decade

“The biggest shift has been the massive amount of seed funding growth that has happened. Something like five hundred new firms focusing on seed have been formed in the last ten years in the US alone.”

Scott also points out that even though there has been an explosion in seed funding, it's still the case that less than 10% of all venture capital dollars are deployed at the seed stage.

“You’ve got this interesting dichotomy, which massive new company formation happening at the seed stage but a winnowing down of the opportunities and increasingly more capital going to winners in particular ecosystems as they mature.”

They also discuss the fact that companies are taking much longer to IPO now than they did in the past, and why that trend is here to stay.

Advice for founders in the new investment landscape

Scott talks about how founders need to adapt to the new investment landscape and walks through some of the biggest mistakes that founders make when they are trying to raise money.

“It’s cheaper than ever to start a company today and we’ve got incredible amounts of seed funding but it’s also more expensive than ever to actually scale the businesses because the markets you can go after are much bigger and people realize they have to look at international markets in parallel.”

The future of venture capital

Ryan asks what the biggest potential disruptor to venture capital could be in the next five to ten years.

“Capital is definitely no longer a scarce resource and therefore if you’re relying on capital to differentiate yourself in the market, that’s not a good place to be. Whether [the future] is ICOs or crowdfunding, I think we’ve permanently gone into a place where you have to provide something other than money to be competitive. I think we’re also going to see more blending between the private markets and the public markets.”

How to think about the long-term relationship between your company and your investors

“It turns out that most VC relationships will last longer than the average marriage in the US, which unfortunately only lasts about eight years. Sometimes you’ll be involved with VCs for ten to twelve years, so it really goes to this fundamental question of understanding the VC’s incentives but also being very clear as an entrepreneur what you expect from your VC.”

“We think about these financing rounds as though they’re episodic because they are, but they’re a part of a continuum and anything you do that doesn’t play well for subsequent investors is probably the biggest mistake I see on both the investor side and the entrepreneur side.”

How a VC thinks and how to understand their incentive structure

Scott pulls back the curtain on VC to explain how an early-stage investor thinks about evaluating your company.

“The question ultimately for an early stage VC is, imagine if this company worked — what could it become? And then the real question that follows from that is, why would I want to back this team versus any number of other teams that might have the same idea.”

Ryan also tells the story of walking into Andreessen Horowitz in sneakers and a Product Hunt kitty t-shirt to pitch the company and finding himself speaking to nearly twenty people.

We’ll be back next week so be sure to subscribe on Apple Podcasts, Google Podcasts, Spotify, Breaker, Overcast, or wherever you listen to your favorite podcasts. Big thanks to Monday.com and Embroker for their support. 😸