20VC Scaling to $122M ARR IPO with $6M in Net Burn, Olo. The Ultimate Journey of Capital Efficiency, What Worked, What Did Not Work and How Leaders Need To Reshape Thinking Around Resource and Attention Allocation

Abstract

Abstract

In a conversation with Harry Stebbings on 20vc, Noah Glass, founder and CEO of Olo, shares his journey from the early inspiration of mobile commerce to building a capital-efficient public company that powers millions of restaurant orders daily. Glass discusses the importance of focus, capital allocation, and the "embrace the suck" philosophy, which helped Olo navigate through lean times and integrate with complex restaurant systems. He credits his investors, including David Frankel, Danny Meyer, and Scott Schleifer, for their support and highlights the significance of separating personal identity from the business, delegating effectively, and maintaining a family-first value system. Despite challenges and moments of doubt, Glass's steadfast vision for Olo and his approach to leadership, prioritizing important over urgent tasks, and fostering a culture of enlightened hospitality have been key to the company's success.

Summary Notes

Capital Efficiency in Today's Market

  • Capital efficiency is uncommon in the present market climate.
  • Olo's public offering showcased remarkable capital efficiency with a net burn of $6 million and an ARR of $122 million.
  • Capital efficiency is a testament to true company building.

When this company went public, it had a net burn of just $6 million and an ARR of $122,000,000. Now that is rare.

This quote highlights the rarity and significance of Olo's capital efficiency at the time of their public offering, emphasizing the company's successful financial stewardship.

Olo's Foundation and Mission

  • Olo is the interface between restaurants and the on-demand world.
  • The company facilitates millions of orders daily and is backed by notable investors.
  • Noah Glass's previous experience includes working at Endeavor Global and the restaurant industry.

Noah Glass, founder and CEO at Olo, the interface between restaurants in the on-demand world. Powering millions of orders per day, Noah arrays from some of the best in the business, including David Frankel at Founder Collective, Danny Meyer, Scott Schleifer at Tiger Global, all on the cap table.

This quote introduces Noah Glass and Olo's role in the restaurant industry, as well as mentioning the high-profile investors who believe in the company's vision.

The Role of Alternative Data for Investors

  • Core Signal's historical headcount dataset helps investors analyze company growth trends.
  • The dataset provides insights into a company's growth, location trends, and social media following since 2018.
  • Alternative data is valuable for enhancing investment analysis and decisions.

With Core Signal's historical headcount data set, investors can easily see the historical growth trends of more than 20 million companies worldwide.

The quote explains the utility of Core Signal's dataset for investors seeking to understand the growth patterns of companies, which is crucial for making informed investment decisions.

Squarespace as a Comprehensive Business Platform

  • Squarespace offers mobile-optimized websites, email campaigns, and SEO tools.
  • The platform is designed to support a beautiful online presence and efficient business management.
  • A discount is available for Squarespace services using a special offer code.

Squarespace is the all-in-one platform to build a beautiful online presence and run your business.

This quote summarizes the benefits of using Squarespace for entrepreneurs and businesses looking to establish or enhance their online footprint.

AngelList's Investment Management Solutions

  • AngelList provides fund management solutions, including SPVs, traditional venture funds, and rolling funds.
  • The platform simplifies the operational complexities of fund management.
  • AngelList Stack is a new product designed to help founders with incorporation, banking, cap table management, and fundraising.

Whether you're running SPVs, a traditional venture fund like me, or even a rolling fund, AngelList has you covered.

This quote emphasizes AngelList's capability to support various types of investment management, highlighting its versatility and value to investors and founders alike.

The Genesis of Olo

  • Noah Glass was inspired by the potential of mobile devices as commerce tools.
  • The idea for Olo emerged from the desire to improve customer experience and restaurant operational efficiency.
  • The initial business plan was written in 2003, with the company eventually founded in 2005.

A mobile device that let me order ahead, pay ahead, and have them prepare my order as I was en route, that would be better for me as a consumer, and it would help them improve their throughput capacity.

Noah Glass explains the core concept behind Olo, which centers around convenience for consumers and increased efficiency for restaurants.

Embracing the Suck

  • "Embrace the suck" is a Navy SEAL philosophy applied to Olo's journey.
  • It signifies the importance of enduring and overcoming significant challenges.
  • The mindset helped Olo integrate into restaurant systems and outlast competitors.

If we can endure, if we can outlast our competitors, if we can integrate into systems in the restaurant, point of sale, systems that weren't meant to be integrated into. If we can get through that suck, we'll be in a place that nobody else will be able to stay with us.

Noah Glass discusses the resilience required to succeed in a challenging market and the competitive advantage gained by enduring hardships.

Celebrating Small Wins and High Pain Tolerance

  • Olo focused on recognizing small successes amidst many challenges.
  • The team's high pain tolerance and ability to "embrace the suck" were critical.
  • Celebrating incremental progress was key to maintaining morale and momentum.

We were a team that was really good at embracing the suck and having a high pain tolerance, but also celebrating the wins and really being in it together.

This quote reflects on the team's camaraderie and their strategy of focusing on positive developments to navigate through tough times.

Capital Raising and Growth

  • Olo raised funds conservatively due to market conditions.
  • The Series A round coincided with the financial crisis, emphasizing the need for prudent financial management.
  • The funds raised were crucial for Olo's survival and growth into profitability.

We raised that money. We had it in our bank balance, and we knew we had to make it last.

Noah Glass recounts the critical moment of securing Series A funding, which required careful allocation to ensure the company's longevity and success.

Crucible Moments in Leadership

  • The concept of crucible moments is highlighted as pivotal in shaping a company's trajectory.
  • Leadership is characterized by making the right calls during these crucial times and being consistent.
  • The importance of setting an example for the team in terms of values and decision-making processes is emphasized.
  • The idea that the decision-making framework should be replicated throughout the company is discussed.

"I think it's making the right call in those crucible moments, being consistent in between and really setting the example for the team about what are our values, how do we make decisions?"

This quote explains that leadership is not only about making critical decisions during high-stakes moments but also about consistently applying the company's values and decision-making principles in everyday situations.

Reflecting on Past Decisions

  • Noah Glass reflects on a past decision regarding Olo's need to go public.
  • He acknowledges that not all board members were aligned with the decision, and in hindsight, it may have been premature.
  • The story illustrates the complexities and challenges leaders face when making strategic decisions for their companies.

"Looking back now, it was at best a toss up and maybe would have been too early in 2019."

Noah Glass reveals his retrospective thoughts on the decision to take Olo public, suggesting that the timing might not have been right and highlighting the uncertainty that leaders must often navigate.

Evolution of Leadership Style

  • Noah Glass discusses how his leadership style has evolved over the years.
  • He emphasizes the importance of creating a separation between personal identity and the business.
  • The ability to delegate effectively is highlighted as a crucial skill for scaling an organization.
  • Noah Glass credits support from his family and learning from external sources as significant factors in his development as a leader.

"Those two things of separating yourself from the business and delegating are really closely intertwined."

This quote encapsulates the interconnectedness of maintaining personal well-being by distancing oneself from the business's ups and downs and the necessity of delegating tasks to scale the business effectively.

Personal Support Systems

  • The significance of having a supportive partner is discussed, with Noah Glass crediting his wife's contribution to his success.
  • He appreciates the value of discussing work problems with someone from a different field, which allows for a fresh perspective.
  • Noah Glass shares the history of his relationship with his wife and how they have supported each other through the growth of Olo.

"My wife has been a huge supporter, worked in the business in the earliest years as our initial CMO, when we were really just getting started, and had a number of brilliant ideas on the go to market strategy, but is a legal historian."

This quote highlights the multifaceted support Noah Glass receives from his wife, both professionally during the early stages of Olo and personally, as they navigate their careers in different fields.

Family as a Company Value

  • Noah Glass explains Olo's "family first" value and how it takes precedence over work.
  • He discusses the practical application of this value, such as generous benefits and parental leave policies.
  • Noah Glass emphasizes the importance of taking care of oneself and one's family before dedicating energy to the company.

"We really sort of built that family comes first value, and you are now emulating that by spending the time on yourself and on your family."

This quote reflects the company's commitment to prioritizing family and personal well-being over business demands, showcasing a compassionate approach to work-life balance.

CEO Coaching

  • Noah Glass speaks about the benefits of having a CEO coach, Patrick, and the structure of their weekly meetings.
  • He appreciates the focus on addressing urgent thoughts before moving on to important matters.
  • The distinction between urgent and important tasks is explored, with an emphasis on not conflating the two.

"Patrick asking that question of anything that's top of mind is a real gift because every time it sort of takes all these urgent things that are swimming around in my brain and we deal with them and then we're able to focus on the important things after that."

This quote explains how CEO coaching helps Noah Glass prioritize and focus on the most critical aspects of his role, clearing his mind of distractions to address truly important issues.

Urgency vs. Importance

  • Urgency often masks itself as importance in decisions that seem critical in the moment but may not be relevant in the long term.
  • Time horizons for decision-making can vary based on roles and future-oriented thinking.
  • Separating urgent tasks from truly important ones is a crucial skill.

"I would say that those things that seem really important right now, but won't be over a long time, those are really what I mean by the things that seem urgent."

This quote explains the distinction between tasks that feel urgent due to immediate pressure and those that are genuinely important for long-term success. It emphasizes the need to differentiate between the two when making decisions.

Facts vs. Judgments

  • Debates often involve judgments that are not rooted in fact.
  • Separating facts from judgments can clarify discussions and lead to more productive outcomes.
  • Demanding data in debates ensures arguments are grounded in reality rather than passion alone.

"So many times you'll get into a debate with somebody and they'll be very passionate about something, and you realize that what they are arguing is purely a set of judgments and not really rooted in fact."

This quote underlines the importance of distinguishing between objective facts and subjective judgments in debates, suggesting that a factual basis is essential for constructive dialogue and decision-making.

Intuition in Decision-Making

  • Intuition plays a role in decision-making, especially when data is unavailable or inconclusive.
  • Conviction and tenacity are important, but they should be open to change when faced with factual evidence.
  • Entrepreneurs must be willing to reevaluate and adjust their assumptions to steer in a better direction.

"I absolutely believe that there is room for intuition."

The speaker acknowledges the value of intuition in entrepreneurship, particularly when creating innovative solutions that data may not yet support, as demonstrated by the origin story of Olo.

High Performance

  • High performance involves managing tasks strategically and executionally with equanimity.
  • Openness to change and ability to maintain calmness and level-headedness are key attributes.

"I think high performance. I'll come back to the equanimity idea, like being able to manage through the tasks at hand."

The speaker defines high performance as the ability to handle various tasks with composure and balance, suggesting that this mindset is essential for effective leadership and entrepreneurship.

Stubbornness: Strength or Weakness?

  • Stubbornness can be seen as both a strength (tenacity) and a weakness (inflexibility).
  • Having high conviction is different from being closed to changing one's mind.
  • Flexibility on details while being firm on the big vision is crucial for success.

"I agree with the old adage that every strength is also a weakness and every weakness is also a strength."

This quote reflects the speaker's belief that traits such as stubbornness have dual aspects and that the key is to balance conviction with openness to new facts and perspectives.

Advice for Entrepreneurs

  • Separating personal identity from the company can prevent personal pain and is vital for entrepreneurs.
  • Attention allocation and capital allocation are intertwined; focus is essential for controlling a company's destiny.
  • Being scrappy and achieving profitability can provide flexibility when the market conditions are right for scaling.

"I really wish I'd known that or really had taken it to heart in the early days, it would have saved me a lot of personal pain, I can tell you that."

The speaker expresses a desire to have understood the importance of separating personal identity from the company's performance earlier in their career, indicating this as key advice for founders.

Capital Raising and Competitive Strategy

  • Raising too much capital can be both beneficial and detrimental.
  • Recognizing the right time to raise capital is critical, especially when an opportunity is unique or time-sensitive.
  • More often, companies raise capital unnecessarily rather than for capturing a total market opportunity.

"I think that outraising can be a blessing and it can be a curse."

The speaker suggests that while raising capital can enable a company to seize significant opportunities, it can also lead to problems if not done thoughtfully and at the right time.

The Curse of Raising Too Much Money

  • Raising excessive funds can lead to a lack of focus and trying to do too many things at once.
  • Being stretched too thin can prevent a company from excelling in any particular area.
  • A focused competitor can outperform by excelling in one area and using it as a leverage point to expand into other areas.
  • Olo's success attributed to focusing on being the best digital ordering application for enterprise restaurant brands in the US, avoiding distractions like global expansion or loyalty programs.
  • Emphasis on being an open platform with APIs and a rich partner ecosystem to complement their services.

"And the curse part of raising too much money is you have to spend the money, you have to go and do things. And oftentimes that can breed a huge lack of focus, and that can mean that you're trying to do too many things at once, you're stretched too thin and nothing that you're doing is really best in class."

This quote highlights the pitfalls of raising too much capital, emphasizing how it can dilute a company's focus and hinder its ability to excel in a specific domain.

The Philosophy of Enlightened Hospitality

  • "Setting the Table" by Danny Meyer is valued at Olo for its concept of enlightened hospitality.
  • The book's philosophy puts stakeholders in a specific order: team, customers, partners, community, and investors.
  • Olo has adopted this approach, prioritizing stakeholders in a way that they believe best serves everyone involved.

"And it preaches this idea of enlightened hospitality, which is about putting your team first, then your customers, then your partners, then your community, and only then your investors."

This quote explains the enlightened hospitality concept, which prioritizes different stakeholders to create a balanced and ethical approach to business.

Personal Takeaways from Working with Mentors

  • Noah Glass's biggest takeaway from working with Frankel is admiring him as a great human being, beyond his professional accomplishments.
  • Frankel is seen as a mentor not just in business but also in personal life.

"Honestly, my biggest takeaway is what an incredible father and husband human being that he is."

The quote reflects Noah Glass's personal admiration for Frankel, emphasizing his character and impact as a mentor in life, not just business.

Challenges of Leadership and Delegation

  • Delegating tasks and realizing when to bring new leaders into the organization is challenging.
  • Olo believes in single-threaded leadership, where individuals are fully responsible and accountable for specific roles.
  • Ensuring the team has autonomy and the ability to execute their tasks effectively is a key focus.

"The most challenging role is probably delegating things, realizing when we need to bring someone into the organization who will take the lead of some new initiative or some new component of the company."

This quote addresses the difficulty in delegating and the importance of appointing dedicated leaders for new initiatives within a company.

Vision for Startups and Entrepreneurship

  • Noah Glass wishes to see more startups that balance doing well financially with doing good for society.
  • He advocates for a shift away from vanity metrics towards celebrating startups with meaningful impacts.
  • The desire is for a startup ecosystem that prioritizes world-changing ideas that benefit future generations.

"I'd like to see more companies that can honestly say we're doing well and we're doing good in parallel."

The quote expresses a desire for startups to pursue success in a way that also contributes positively to society.

Personal Development and Conflict Avoidance

  • Noah Glass identifies conflict avoidance as a personal weakness, stemming from his family dynamics.
  • He has worked on recognizing and addressing conflicts more proactively.
  • His wife, sharing a similar background, understands and recognizes this trait.

"My biggest weakness is almost definitionally conflict avoidance."

This quote reveals Noah Glass's self-awareness about his tendency to avoid conflict and his efforts to improve in this area.

Marketing and Product Innovation

  • Olo focuses its marketing efforts on restaurant buyers rather than consumer or tech press.
  • Olo Pay is their latest product, offering one-click checkout across a vast network of restaurants.
  • The billboard message would emphasize the convenience and reach of Olo Pay.

"The newest thing that I would promote if I had a billboard is our newest innovation, and that's a product called Olo Pay."

This quote discusses Olo's strategic marketing focus and highlights their new product, Olo Pay, which aims to streamline the checkout process for consumers.

Future Vision for Olo and Digital Hospitality

  • Noah Glass envisions a future where all restaurant transactions are digital, leading to enhanced hospitality experiences.
  • Data-driven personalization will allow restaurants to treat every guest as a long-time regular.
  • Olo aims for significant growth through expanding locations, increasing orders per location, and generating more revenue per order.
  • Digital entirety and hospitality are central to Olo's long-term strategy.

"So we are driving toward what I call digital entirety, which is every restaurant transaction being digital."

The quote outlines Olo's ambition to digitize the entire restaurant transaction process, enabling a higher level of hospitality through data utilization.

Acknowledgments and Partnerships

  • Noah Glass expresses gratitude for the opportunity to share his insights and experiences.
  • He acknowledges the importance of tools like Core Signal and Squarespace, and the support of AngelList in managing investments and supporting founders.

"Harry, thank you so much. It's an honor to join you."

This quote concludes the conversation with a note of appreciation for the discussion and the platform provided.

What others are sharing

Go To Library

Want to Deciphr in private?
- It's completely free

Deciphr Now
Footer background
Crossed lines icon
Deciphr.Ai
Crossed lines icon
Deciphr.Ai
Crossed lines icon
Deciphr.Ai
Crossed lines icon
Deciphr.Ai
Crossed lines icon
Deciphr.Ai
Crossed lines icon
Deciphr.Ai
Crossed lines icon
Deciphr.Ai

© 2024 Deciphr

Terms and ConditionsPrivacy Policy