Harry Stebbings hosts Joel Gascoigne, co-founder and CEO of Buffer, on "20 Minutes VC" to discuss Buffer's journey from venture-backed to a profitable, independent business. Buffer, a social media management tool, bought out majority Series A investors, emphasizing sustainable growth over traditional venture expectations. Gascoigne shares his experience with the pressures of VC funding and the importance of aligning company goals with personal values. He advocates for transparency within teams and the need for founders to ensure their work continues to inspire them. The conversation also touches on alternative funding models and the significance of maintaining control to experiment with company culture and direction.
"With that, I'm thrilled to welcome Joel Gascoigne, co-founder and CEO at Buffer, the social media management tool that makes it easy for businesses and marketing teams to schedule posts, analyze performance, and manage all their accounts in one place."
The quote introduces Joel Gascoigne and Buffer, highlighting the company's function and its journey towards independence and profitability.
"Joel, it is such a pleasure to have you on the show today. I've been a big admirer of your writing for a long time, so thank you so much for joining me today."
Harry welcomes Joel to the podcast, acknowledging his respect for Joel's written insights which he has followed for a long time.
"And then after that, that's when I had the idea for buffer. And the initial aha moment for buffer was that I found that if I shared content on Twitter, if I shared my thoughts or articles I was reading and finding interesting, it was just a great way to meet other people and network, and sometimes I'd meet those people in person."
Joel describes the inception of Buffer, which originated from his personal need for a better way to share content on social media, leading to the creation of a tool that would space out posts automatically.
"I think there's a couple of key things. One is that when you're fundraising, a lot of people don't realize that there's a point along the way in fundraising where you are no longer the boss anymore."
Joel points out a critical shift that occurs during fundraising where founders may lose control and autonomy over their company, which is an often underestimated aspect of taking on investors.
"But to me, that's not necessarily thinking deeply about building a really sustainable company, because I think the thing that's missing is, what is the cost of that capital?"
This quote highlights the overlooked aspect of capital cost in the pursuit of growth, suggesting that sustainable company building requires deeper consideration of financial implications.
"But there was a moment in the year two years leading up to that that I started to feel that the investor would have liked it to be the case that I wasn't the boss anymore and that they could take over."
The quote reflects the tension between founder autonomy and investor influence, illustrating the challenges founders face in retaining control of their company's direction.
"And that to me just generally is not great for customers, not great for the team, and it feels like a really big missed opportunity in the current investor kind of ecosystem right now."
This quote expresses Joel's concern about the negative impact of the traditional VC model on customers and team members, as well as the missed opportunities for more founder-aligned investment structures.
"I wish that investors were more frank with founders during the process, because it is this process of both sides kind of trying to woo each other, especially if startup has traction and things."
The quote highlights the need for transparency and honesty in the investor-founder relationship to set realistic expectations and align goals.
"The point when we decided to focus on profitability, within a couple of years, we went from either losses each year or just 100,000 in profit around those kind of numbers to 2 million and 3 million in profit in the last couple of years respectively."
This quote illustrates Buffer's strategic decision to prioritize profitability, which resulted in substantial financial gains even as growth rates slowed.
"And it just feels like this cycle that I've settled into in a way, which is just trying to, every once in a while, maybe it's once a year or a couple of years to really try and deeply think, how are you feeling about this journey that you're on? Is it still lighting you up?"
This quote emphasizes the importance of self-reflection for founders to ensure their personal passion aligns with their company's direction.
"And there's been a few points along the way where one of the interesting things as an exercise is to kind of map out the trajectory that you feel like you're on in terms of what is the company going to look like along this path two to three years from now?"
The speaker discusses the practice of forecasting the company's future to gauge personal alignment and excitement about its direction.
"I think you almost have diminishing luxury to do that as time goes on."
Joel acknowledges that the ability to change what inspires a founder diminishes as the company grows and more stakeholders are involved.
"So we can all, I like to think if buffer can be this vehicle for what lights all of us up in the company and we can keep pursuing kind of what lights us up, that is an exciting kind of vision for the company."
Joel envisions the company as a platform for all employees to pursue their passions, not just the founder's vision.
"I mean, I think it was one of the toughest things to hear for, you know, I guess initially in the moment, there's that level of shock and there's just thinking through, okay, what do I even say to that?"
Joel reflects on the emotional impact of being asked to consider stepping down as CEO.
"And then I think overall, stepping away from the immediate thoughts around that and reaction to it, I realized that really where that came from, this place of having quite a clear misalignment on what is the goal here, where do we want this company to go and to get to?"
Joel discusses the realization that the suggestion to step down stemmed from a fundamental misalignment of goals between him and the investor.
"Yeah, when I think about leaning into transparency, I mean, really j"
The transcript is cut off, but Joel begins to address the concept of leaning into transparency, suggesting it is a guiding principle for him.
(Unfortunately, the transcript ends abruptly without a complete sentence or further context to elaborate on the theme of transparency in leadership.)
"Just challenging yourself with, can you share more with your team? Can you be more open with them about what the goals are and about the numbers, the revenue numbers, how much cash is in the bank, the real state of the business, the growth rates, the way the market's changing, just being open, laying it all out there."
This quote underlines the challenge leaders face in deciding how much information to share with their teams, advocating for complete openness about the company's status and goals.
"I think sometimes, as leaders, we almost treat our team as children or something. They can't handle those details or that truth or something. And I think that's just really a disservice to everyone that you've brought on board."
Joel criticizes the tendency of leaders to underestimate their team's ability to handle difficult information, suggesting that this approach is not respectful to the team's capabilities.
"Absolutely. And I think it's so important in terms of kind of engendering a sense of ownership within everyone, within the organization."
Harry concurs with Joel's views, highlighting that transparency contributes to a feeling of ownership among employees, which is beneficial to the organization.
"A book called Joy at work by Dennis Becky. And the reason is because it's really a tale of someone building a very substantial company, a public company, and the challenges of staying true to the values that they've put in place and kind of placing values above growth in order to gain long term sustainability of the culture and performance."
Joel explains why "Joy at Work" is his favorite book, focusing on the balance between upholding company values and pursuing growth.
"Just really try hard to make information, data, ideas, and decisions flow freely regardless of where someone is, and really just try to avoid having any sense of a second class citizen within the organization, usually someone that's not in the office."
Joel advises that a remote-first approach is key to successful remote teams, emphasizing equal access to information and inclusion for all team members.
"The current key one that I've been referring back to for a few years now is the Ralph Waldo Emerson quote, which is do not go where the path may lead, go instead where there is no path and leave a trail."
This quote represents Joel's personal motto, encouraging innovation and leadership by venturing into uncharted territory.
"In college I had the inflection point of shifting from service revenue to product revenue and escaping that hourly kind of wage."
Joel recounts a significant change in his life when he transitioned from earning hourly wages to generating product revenue, which was a pivotal moment in his career.
"Two things. One is fundraising, which I think there really needs to be more of a spectrum of options there rather than just the VC approach."
Joel proposes that Silicon Valley should offer a broader range of fundraising mechanisms, not limited to traditional venture capital.
"And then I think over time we'll be able to create this situation where everyone in the company can really benefit. From the great work that we're doing together."
Joel outlines Buffer's future plans, which include shared success and benefits for all company members through profit sharing and dividends.
"I just want to take a minute to say two things, really. First, a huge thank you to Joel for being willing to be so open and honest."
Harry expresses gratitude towards Joel for his candidness during the podcast, which contributed to a remarkable episode.
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