20VC How To Win The Strategic Process Of Fundraising and Optimising CoFounder Relationships and Break Ups with Kathryn Minshew, Founder & CEO @ The Muse

In this episode of "20 Minutes VC," host Harry Stebbings interviews Catherine Minshew, CEO of The Muse, who shares her journey from working on vaccines in Rwanda to co-founding a company dedicated to career development. Minshew discusses the importance of a respectful and complementary co-founder relationship, as exemplified by her partnership with Alex, and the value of transparency and process in successful fundraising. She also emphasizes the challenges and strategies of scaling a team that maintains a startup culture, the significance of aligning with core values, and the vision for The Muse to become the most trusted career destination. Special thanks are given to Sasha Orloff of Lendup for the introduction, and the episode also features a promotion for Visible VC and Eve mattresses.

• Catherine Minshew is the CEO of The Muse.
• Recognized in Forbes's 30 under 30 in media and Inc's 15 women to watch in tech.
• Formerly worked with the Clinton Health Access initiative and at McKinsey.
• Has spoken at prestigious institutions and appeared on various media platforms.

Catherine is the muse's CEO, named to Forbes's 30 under 30 in media and Inc's 15 women to watch in tech. Before founding the Muse, Catherine worked on vaccines in Rwanda and Malawi with the Clinton Health Access initiative and was previously at McKinsey.

The quote introduces Catherine Minshew's credentials, highlighting her achievements and past experiences that shaped her career before founding The Muse.

• Catherine's career aspirations changed after an internship at the US embassy.
• She explored various career paths, including working at McKinsey and with the Clinton Health Access Initiative.
• The Muse was founded to provide career guidance and insights into companies and career paths.

So about four and a half, actually. Nearly five years ago, my co-founder, Alex and I started the muse. And our deal was very simple. We wanted to create the most beloved and trusted career destination, period.

Catherine explains the mission behind The Muse and her partnership with co-founder Alex, emphasizing their goal to create a premier career resource.

• Catherine and Alex have complementary skills and manage different aspects of The Muse.
• They have deep respect for each other's strengths and defer to one another in their areas of expertise.
• Disagreements occur but are handled respectfully with the company's best interest in mind.

Alex is my other half. Right. Without her, there would be no muse. And I think we have been an incredible pair since day one, although it's not always easy.

Catherine speaks about the importance of her co-founder Alex and their synergy in building The Muse, acknowledging the challenges but also the strengths of their partnership.

• Disagreements are approached constructively and with respect.
• Arguments are framed around what is best for the company.
• Understanding each other's communication styles is crucial.
• Taking breaks and revisiting discussions can lead to resolutions.

Handling founder disagreements. First of all, as a baseline, you have to be respectful, you have to disagree in a constructive fashion, and you have to put the company first.

Catherine outlines the foundational principles for resolving disagreements between founders, focusing on respect, constructive dialogue, and prioritizing the company's interests.

• Catherine Minshew and Alex were co-founders of a company before The Muse.
• They faced a founder disagreement due to differences in vision, style, and approach.
• The disagreement led to a painful breakup with the other co-founders.
• Catherine and Alex learned to address potential conflicts early on.
• The experience taught them to never compromise on values.

"So Alex and I were two of the four founders of that venture. We had two other co-founders, and we really had differences in vision, in style, in approach right from the beginning."

This quote underlines the initial conflict that arose due to differing visions and approaches among the co-founders, which ultimately led to a breakup.

"And to make a long story short, we had a really painful breakup."

The quote succinctly summarizes the outcome of the unresolved differences among the founders, which was a difficult separation.

"And I think it helped us with problem solving with people know."

Catherine reflects on how the experience improved their problem-solving skills, particularly in dealing with people and potential conflicts.

"And that was also a lesson of, like, never compromise on values, ever, because you will regret it every time."

The quote emphasizes the importance of adhering to one's values in business partnerships, which was a key lesson learned from the founder breakup.

• Catherine Minshew describes the scaling process as exciting.
• She emphasizes the importance of focusing on her strengths and delegating to others.
• Catherine and Alex interviewed every new hire personally until the team grew to 100 people.
• Hiring leaders with the right fit and giving them autonomy is crucial.
• The right leaders should be able to run their own "ships" within the company's "armada."

"I've loved the process of being able to really double down on where I can bring the most value to the muse and the areas where I love interacting and the things only I can do."

This quote highlights Catherine's approach to scaling by focusing on her unique contributions and strengths.

"And if you've got a great general, let them do their job and give them that space and that authority."

Catherine uses a metaphor to explain how she empowers leaders within the company to take ownership of their teams and functions.

• The Muse has six core values that are crucial for every team member.
• Catherine and her team interview for culture fit without explicitly revealing the core values to avoid manipulation.
• Hiring decisions are based on both capability and alignment with the company's culture.
• Key hires, such as the head of sales, have been pivotal in the company's growth.

"We early on laid out six core values that we think every single person who works on the muse needs to abide by."

This quote underscores the foundational importance of core values in building the company's team and culture.

"Our head of sales, Doug Freeman, our VP of sales, absolutely tremendous hire."

Catherine highlights a specific example of a crucial hire that significantly contributed to the company's success, demonstrating the impact of aligning skills and culture in the hiring process.

• Hiring the right people for a sales team is crucial for a company's success.
• It's important to resist the urge to hire just anyone due to urgency, and instead wait for the right candidate.
• The right sales leader can align the team with the company's core values and significantly boost revenue.
• Leaders replicate themselves in their teams, so it's vital to hire individuals who are aligned with the company's values and vision.
• A leader should not only have a strong skill set but also be the glue of the executive team and the business.

"And when Doug joined, it was night and day, both in terms of my role and being able to move into other areas of the business where I could add much more value. But in his ability to really build up a team that stayed very true to our core values."

The quote emphasizes the transformative impact that hiring the right sales leader, Doug, had on the business, both in terms of allowing Catherine to focus on other areas of the business where she could add more value, and in Doug's ability to build a team that adhered to the company's core values.

• Understanding when to figure out answers on your own and when to find existing solutions is a core business skill.
• Identifying and hiring world-class individuals is essential, especially for areas with established best practices.
• It's critical for hires, particularly leaders, to have strong values aligned with the company's core values and vision.
• Leaders will replicate their values and behavior in their teams, so the hiring bar must be high.
• Aspirations of the hires should be in sync with the company's, and they play a crucial role in the continuity of the team's culture and skill set.

"I think that building a business, one of the core skills is understanding where you can figure out the answer and where you need to find the answer that already exists."

This quote highlights the importance of distinguishing between situations where one can independently find solutions and where it's better to rely on established best practices and expertise.

• There are significant learnings to be had from raising capital at different stages.
• The seed round was challenging, while the Series A and B were more successful and oversubscribed.
• The biggest differences between the seed round and the later rounds were the company's numbers and the fundraising process.
• Running a structured process before engaging with VCs is vital, including planning who to speak to, how to get in touch, and understanding each VC's focus.
• Transparency and honesty are key in dealing with investors, both regarding the business and the fundraising process.
• It's beneficial to keep VCs informed about the fundraising timeline and progress without being untruthful or overly aggressive.

"One of the key learnings was that we really ran a process we structured ahead of time. Before we talked to a single VC, we said, who do we want to speak with? What are our introductions?"

This quote underscores the importance of having a structured and strategic approach to fundraising, including identifying potential investors and planning how to engage with them.

• Founders should be upfront about their business, its successes, and its challenges when dealing with investors.
• Honesty in the fundraising process is crucial as it builds trust and prevents future surprises.
• It's helpful to keep VCs informed about the fundraising process, including the stages of the process and when decisions are likely to be made.
• Timing and communication with VCs can help ensure that all parties have the necessary time to consider and align on potential investments.

"I think that it is in everyone's best interest, but especially founders, to be upfront. This is the business we have, these are the successes, these are the challenges."

The quote emphasizes the importance of transparency and honesty from founders when communicating with VCs, ensuring that there is a clear understanding of the business and its trajectory.

• Discussing VC funding strategies and communication with potential investors.
• Importance of updating VCs on the fundraising process without revealing information about other interested parties.
• The long-term relationship aspect of choosing the right VC partner.

"I think I would never tell a VC who else I'm talking to. That's just not great practice. But certainly giving them an update about how the process is moving and when I expect it to come together."

• The quote emphasizes the balance between transparency and discretion in VC communications. It suggests that while it's important to keep potential investors informed about the progress of fundraising, it's not advisable to share details about conversations with other VCs.

• A segment in the podcast where the guest responds to short statements with immediate thoughts, limited to 60 seconds each.

"And I'd love to dive into a quick fire round with you now. So I say a short statement and 60 seconds for your immediate thoughts. How does that sound?"

• This quote sets up the quick fire round segment's format, involving rapid responses to prompts within a one-minute timeframe, showcasing the guest's spontaneous thoughts.

• Discussing Catherine Minshew's favorite book and the reasons behind her choice.
• The book "Arcadia" by Tom Stoppard is highlighted for its exploration of human behavior and its relation to scientific principles, as well as its humor.

"Arcadia by Tom Stopperd. It's a play, but you can read it as a book. It's beautiful, and it explores these fascinating questions of why people behave in the way they do..."

• Catherine expresses her admiration for "Arcadia," noting its blend of literary beauty, intellectual exploration, and humor, which contribute to its lasting impact on her.

• Reflecting on the value of being part of a peer network during the YC accelerator program.
• The benefits of learning from fellow founders and maintaining connections post-graduation.

"My biggest takeaway from YC was the power of a peer network."

• This quote underscores the significance of peer support and networking in the startup ecosystem, particularly within an accelerator context like Y Combinator.

• Catherine Minshew's positive reaction to LinkedIn's acquisition by Microsoft.
• Viewing the acquisition as market validation and an opportunity for other companies to focus on individual career experiences.

"I think that the Microsoft acquisition does have shareholder value, and there are some interesting synergies. But if anything, I believe it will pull LinkedIn a direction that opens up even more space for us..."

• Catherine interprets the acquisition as beneficial, suggesting that it could lead to strategic advantages for other players in the career development space by redirecting LinkedIn's focus.

• Discussing Catherine Minshew's preferred reading material, including blogs and newsletters.
• A preference for established publications like The Atlantic, The New York Times, and The Economist, as well as daily digests like the Skim.

"I love reading the Atlantic. I mean, I'm addicted to the New York Times."

• The quote reveals Catherine's inclination towards reputable news sources and her habit of staying informed through these publications.

• Addressing the difficulties of engaging with all parts of an organization during rapid growth.
• The challenge of scaling personal involvement and ensuring quality time with new hires.

"Continuing to engage with every part of our organization deeply as we scale."

• Catherine acknowledges the complexity of maintaining deep organizational engagement while managing a growing team, highlighting the importance of personal connections.

• Outlining the five-year roadmap for The Muse, focusing on personalized career navigation and development.
• Emphasizing the importance of trust and user-first approach in serving the marketplace.

"We have laid out our big picture vision fairly clearly since the early days, and that is to build the most trusted and beloved place for people to navigate their career."

• This quote encapsulates the strategic vision for The Muse, aiming to create a highly personalized and trusted platform for career development.

• Expressing thanks to Catherine Minshew for participating in the podcast.
• Acknowledging the role of introductions in facilitating the interview.

"Catherine, it really has been such a pleasure to have you on the show. So grateful to you for giving up the time..."

• The quote conveys appreciation for Catherine's contribution to the podcast and the value of her insights shared during the episode.

• Promoting social media engagement and newsletter subscriptions for the podcast.
• Highlighting the benefits of stakeholder communication for securing follow-on funding.

"And if you love the show today, then you can add me on Snapchat at htebbings. You can add Catherine on Twitter at kmin, or you can sign up to the newsletter on the Twentyminutevc.com."

• The quote encourages listeners to engage with the podcast through various social media platforms and to subscribe to the newsletter for updates.

• Endorsing sponsors and partners of the podcast, such as Visible VC and Eve mattresses.
• Mentioning special offers and services provided by the sponsors.

"Visible VC is the leader in stakeholder communication and engagement... Eve, make one perfect mattress."

• These quotes serve as promotional endorsements for the podcast's sponsors, highlighting their products and services while offering exclusive deals to listeners.