By Geoff Roberts 11 min read
This is not the first blog on the web highlighting admirable or inspiring companies. That said, we’ve spent quite a bit of time lately thinking about and discussing how we’d like to build Outseta. Many of the companies that have come up in our discussions are included on our list below. Some of them we simply appreciate because of the decisions they’ve made while growing their businesses. Others have inspired us to the extent that we’re planning to directly steal their ideas and concepts as core elements of our own operational strategy. The common theme running through this list is that the majority of these businesses are challenging assumptions of how people should work together while creating organizations that bring out the best in people. These companies work hard to foster environments where people feel fulfilled, trusted, and empowered to take initiative every day. If that tickles your fancy, read on!
Semco is a Brazilian company that’s known for its controversial business management practices and corporate reengineering. CEO Ricardo Semler grew the organization from $4mm in revenue in 1982 to $212mm in 2003, all the while pioneering principles and operating procedures based on trusting your employees and not having a lot of rules within the organization. The company has been described as “insanity that works” and their CEO has been described as a “corporate rebel.” What we like most about this company is that they’ve shown that self management principles can work at scale - the company has more than 3,000 employees today, and has experienced less than 1% churn in their workforce over the last six years. Unlimited vacation time policies that are so prevalent today (particularly in tech) originated at Semco. This is a really interesting podcast with their CEO - one of my favorite stories is Semco was having problems with their employees stealing some of their products, which were kept under lock and key because they were very expensive. Unsure of what to do, Ricardo decided to no longer lock up their inventory - a statement that said loudly and clearly, “we trust you” to the people in the organization. Amazingly, once he made this change the issues with product theft all but disappeared.
Tower Paddle Boards
Tower Paddle Boards is a San Diego based company that sells manufacturer direct stand up paddle boards, in addition to the Southern California beach lifestyle. The company recently embraced a 5 hour work day in order to support their employees’ desire to live that SoCal lifestyle, and it hasn’t slowed them down one bit - Mark Cuban famously invested in this business via Shark Tank and the company has landed on the INC 5000 list of America’s fastest growing companies each of the last two years. Also of interest - they emphasize hiring great people over hiring for specific roles, and ask all job applicants to send them a 2-minute video application.
Wistia is a Boston based SaaS business offering “your friendly neighborhood video hosting platform.” Dimitris and Geoff were early customers of the company at Buildium, with both companies sort of growing up together. There’s a lot that we admire about this company…
They’ve resisted the temptations and trends to grow at all costs; they took a small angel investment early on and have been very deliberate throughout their growth.
They’ve almost never raised prices.
One of the biggest early investments they made was in office space, because they cared deeply about creating a great working environment.
They’ve always been willing to lend an ear or a hand (thanks Chris and Brendan)!
The product is awesome. Nuff said.
ConvertKit is an email marketing platform for professional bloggers. One of the company’s values is “Teach everything you know,” so they’ve always made their revenue performance public and written about their path to (currently) $600,000+ in monthly recurring revenue (MRR). They are a completely distributed team of 25 and have always made a concerted effort to stay small. The company is currently operating with a 25%-30% profit margin and participates in profit sharing with their employees. Metrics like revenue per employee and customers per employee have been tracked since early on; something we’ll look to replicate at Outseta.
Patagonia is a California based outdoor apparel company that constantly lands on lists just like this one. The company has always celebrated the outdoor lifestyle its products are built to support, and has used environmentally friendly materials long before it was en vogue to do so. Flexible hours, on-site childcare, and 16 weeks of paid maternity leave as well as 12 weeks of paid paternity leave are examples of the company’s focus on their employees' experience.
FogCreek is a software company that started in New York - they are well known for founding Trello (which we use at Outseta), which they later spun off into its own company and sold to Atlassian. They’ve taken an interesting approach to compensation, as they’ve long wanted to foster a workplace where software developers don’t feel pressured into personnel management if they want to be promoted. They have a compensation ladder with all employees at the same level making equal pay, and a limited number of job titles. Again, financial rewards are gained via profit sharing. Six weeks of paid vacation is the norm, as is three weeks each year dedicated to training. New employees receive a 10% signing bonus that must be paid back if you leave the company within 12 months.
Zappos is another company that lands on lists like this one all the time. The Zappos Culture Book has long been a staple in Buildium’s offices. Most of what we like about Zappos is directly attributable to their CEO, Tony Hsieh. He’s completely sold on the concepts of self management and employee empowerment, and despite the fact that Zappos did not start out as a non-hierarchical organization, he didn’t shy away from making that change (7% of Zappos’ Managers left the company after the change). Tony uses a metaphor when talking about his company - Zappos is a village, and he’s the mayor - meaning he’s just there to serve the people of the village. The company also takes an interesting approach with new hires - they pay new hires to quit within their first 90 days, taking a proactive approach to exiting new employees who don’t feel that they’ve found a good fit for themselves at Zappos.
Basecamp is probably the company that’s been our most consistent source of inspiration. They spent a lot of time and effort thinking about how to structure their organization so that they can keep it at a size that’s easy to manage, and have focused on creating a place that you’d want to work - even if that means sacrificing some growth. They don’t have a sales team and have done very little in the way of paid advertising to acquire customers - they’ve instead focused on content marketing and “building a tribe” of passionate users. They spend a lot of time and effort sharing details of how they work and operate - while these philosophies may not directly correlate to new business or users of their product, they believe enough in their approach that they take the time to share it with the world. To date they’ve written a few books about how they operate, and they also host live sessions at their headquarters walking people through how they work. The company’s Signal V. Noise blog is a favorite of ours.
Toms shoes has quickly become synonymous with social entrepreneurship - for each pair of shoes that they sell they donate a pair to someone in need. They offer a good product, and their customers are OK with paying a higher price point because they are a mission driven company. What we like most about Toms is that their CEO and early employees actually took the trek to the underprivileged communities they were donating shoes to, and distributed the shoes themselves, in person. It would have been easy and less expensive to simply ship the shoes overseas, but that was never the point and the power of those experiences created an extremely loyal workforce.
HolacracyOne is a consulting company that has gone the furthest with experimenting with self management principles. They’ve consistently published content on emerging best practices within self-managed organizations, and are very much at the forefront of thought leadership in this area.
Valve is a Seattle based gaming company founded by a team from Microsoft. They were among the first companies out there to embrace self management in the late 90’s and early 2000’s, although they’ve never talked a lot about it. When you show up on your first day you’re given their employee handbook, which is inspiring and outlines their unique approach to performance and compensation management. When you start at Valve you aren’t hired to a specific team or department, but instead you simply start working on a few different projects and gravitate towards those that interest you most. The company focuses on hiring experts in different fields - artists, developers, etc. - but they don’t plan out how things are going to happen and instead let work happen as organically as possible.
Mailchimp is another company that’s constantly landing on lists like this one. They have stayed private, and have crushed companies that were much better funded than they were. We admire the brand that they’ve built, and are big fans of their content style guide.
Squarespace is a website building platform, and a company who knows who they are - they are not trying to be all things to all people. Their product is reasonably priced, and they’ve emphasized ease of use and user experience over all else. We chose to build the first version of our website using Squarespace, and their help content is second to none. Whenever we’ve had any sort of question we’ve been able to find appropriate documentation and resolve our question or issue ourselves - very few tech companies truly deliver on this level of self service. It would be amazing to know how much their knowledge base saves them in customer support costs.
Groove is another small, distributed team that builds help desk software. We like just about everything they say on their “About Us” page - they advocate for a sane work schedule, they’re in it for the long haul, and they emphasize that the journey of building the company is more important than the destination. The result? The company has only been in business for about 3 years and supports 6,000+ customers with just 12 employees. Last but not least, the blog they’ve written detailing their start-up journey is second to none. Cheers to you, Alex and team!
InvisionApp is growing like a weed - it seems like in just a few years InvisonApp came from nowhere to being used by seemingly every product design team in the SaaS industry. And all of that growth has been accomplished with a 100% remote workforce - there is not a single corporate office. They feel the benefits of opening up your hiring pool to the world far outweigh the benefits of being co-located - we tend to agree.
Baremetrics combines the majority of the characteristics that we’ve called out throughout this list - they are mission driven, have passed on growth at all costs, support a remote workforce, and have shared fantastic content throughout the course of their start-up journey.
It may seem strange to see a venture capital firm on this list, given how much we’ve spoken about focusing on profitability and not chasing growth at all costs. Well, the team at IndieVC says it better than we can in the introductory paragraph on their website. “Real businesses make products and sell them for a profit. They focus on customers, revenue and profitability not investors, valuations and the next fundable milestone. Real businesses prioritize their customer’s needs over their customer’s eyeballs. They have a functioning business model, not a believable financial model. Real businesses want to stay in business, not run for the exit. They create their own source of funding and don’t have to ask anyone for permission to exist. We believe real businesses make really great investments.”
Dimitris can’t say it, given that he co-founded Buildium and that could be construed as self-serving… but I can (Geoff here). I was insanely fortunate to start my career at Buildium and work with a team that always put ethics, the employee experience, and my interests as an individual above all else. The company’s mission to “help small businesses succeed, while setting the highest standard for how business should be done” is very real. The number of remarkable and admirable things that I witnessed at this company, behind closed doors when no one was watching, is something that will always stay with me. My experience at Buildium will forever shape my professional priorities and philosophies on work.
Not a bad list, eh? It’s companies like the ones above that keep us motivated, hungry, and inspired as we work to build Outseta into the company we know it can be. We are convinced that there’s a better way to build a sustainable organization, rejecting leaders that employ a rigid form of command and use fear, status, power, or money as carrots to bring out the best in people.
Without question we feel that there’s a strengthening tide of businesses that truly care about the journey over the outcome, about the potential of self management practices, and about the well-being of employees both inside and outside of work. That’s what will keep us going, and we could not be more excited put these principles first to help further that strengthening tide. We want to lead by example in changing how work is done and perceived, as it has the potential to benefit us all.