SPONSORED

ABOUT THIS EPISODE

Company culture is tricky to define and often even harder to implement. It goes beyond your mission statement, the values listed on your website, or your HR policies; it makes up the day-to-day in the office: how you act, how you communicate, what values you promote, and what message you send to your customers, employees, and broader community. From their San Clemente-based office, equipped with a skate bowl, basketball court, and cold-brew coffee on tap, Kearl and his fellow cofounders have deliberately molded Stance’s culture throughout its growth to reflect the values they live and breathe by—inspiring their employees to do the same.
English
United States
SPONSORED

TRANSCRIPT

00:00:00welcome to lead I'm Jordan Ormond Towne partner Menlo Ventures lead is a podcast for next-generation entrepreneurs that focuses on best practices around leadership culture and building world-class teams
00:00:20today we have the distinct pleasure of speaking with Jeff kearl few people are as qualify to talk about building high-performing teams and setting company culture is Jeff Jeff is the co-founder and CEO of stance current mellow Ventures propeller company which is a sport start up as a form of you see an angel investor Jeff has invested over 30 startups including over since starting stance Jeff has a symbol of powerhouses celebrity personalities around his brand ranging from a recording artist Like Jay-Z Rihanna and Big Sean too well-known athletes of James Harden and Dwyane Wade stance has been recognized as if there's a sock in the NBA and Major League Baseball now 8 years until it's turning the company sold over 15 million pairs of socks today and is raised over a hundred million of venture capital funding stance has gotten the Cotton brand stand for celebrating human originality and self-expression
00:01:13and who would have thought all this would have been possible in a category like socks it's a testament to the counterculture Jeff is built around his company and their values which are deeply held by every employees hired while this and I appreciate you taking that the time that I was excited to to connect live with you you always thinking back last night as I was thinking about this interview and you know I think we met in 2011 in the backcountry of a British Columbia through a ski trip that one of our mutual friends I put together and at the time you were out running Skullcandy company that you are that you started and when I was thinking about who I wanted to interview around culture you're actually the first person who came to mind and I think I mean reason for that is I've always admired your holistic view on life both personally and professionally in the marathon a pro she taken to building your company's
00:02:11and when I reflect back to 15 years ago when I moved out to Silicon Valley you know it was a badge of honor to grind and it to work 24/7 and that was definitely my mentality early to mid-twenties and yeah it took some time to evolve into understand that you can get the same results without any working 24/7 and something that is always admired about you then and how you just a philosophy that you've taken to a new building in a chance to win and I'll probably back through the mid 2000 and that's really where I was in The Grind Mode a hundred percent and same as you I felt like it was a badge of honor to do it and we were lucky in that three years in HP bought up in an all-cash deal
00:03:07but as a reflected back on it I was sort of asking myself the question like cheese if we had lived more Balanced Life Would we have got the same place in three and a half or four or four and a half years
00:03:25did the hustle to get there so quickly really make a difference and when I looked back maybe the growth rate
00:03:34you know did make a difference but I'd also say the experience the people that I worked with what it felt like to go to work everyday would have probably been better if we would have done in there more balanced way and that's kind of what led me to cheese left right in a balanced way and then the original founder of Skullcandy when I was asking him why he did headphones he said that he had a company that sold to ski companies snowboard binding company and you trying to figure out what to do next Because I Got High think I'll go get a job and he loved fly fishing skateboarding and snowboarding so he went and bought all the hit the magazines for those things and you just looked at all the ads and then went to the websites of all of those
00:04:34bunnies and start applying for job got a job designing fly fishing reels out in like Vermont or New York somewhere Upstate New York and ended up patenting a couple of fly fishing reels for these innovative ideas he had and I was like Wow here's a guy that would never work on something that wasn't his passion like you and even consider it there were it was never about the money it was like I need to go do something that I love and I think kind of watching him actually pull it off
00:05:12was really what got me thinking I got to live that way and in what was what was the Catalyst for stats what it what an interesting category to Target and to build a business at the sock business and what was the what was the Catalyst for that business yeah so when he started the primary headphone competitors were Sennheiser both Sony and they were all positioned very similarly homogenized black and silver was all about sound quality and I made a reference Colin Skullcandy believe it or not it was to this buyer at a retail named musicland
00:06:02and they were like a CD shop in every shopping mall and I got like eight hundred doors at the time it was very large this was Jesus have any 2003 in and I called the buyer and he had been buying headphones for Music Land for 20 years and it was brand new at the time different from the other three the one that stands out and so that really like left a mark on me and the idea that when you're doing a new category you have to be completely contrasted to all the other incumbents for the buyer to want to bring you in
00:06:49and so as we started thinking about other categories we looked at jewelry we lived in luggage there were several categories that we thought could be interesting in the back of the line with all his cheese how are we going to look different than all the income and how are we going to really stand out not just visually but also in substance and so as you can imagine seven years ago the stock Iowa no stores was black white blue gray multipacks maybe from the wild argyle socks at the bottom and coming from Skullcandy where we had done headphones for Durant and Harden and Snoop Dogg and Metallica and we figured out how to put art on headphones
00:07:38would like Jesus look like a blank canvas yeah so that was one of the reasons that socks look attractive
00:07:48and it tell me a bit about you know they want it at Stan's or you know you're at your first week with the founding team in I know culture and core values is no very important to you how were they originally created at Stan's see how did you go about it I'm love with your kind of the steps that you took to to to put it all together
00:08:10culture and core values is always happening
00:08:18it's just a matter of whether you actually acknowledge it in Starrett so you can ignore it but it's developing on its own so in case of Stan's I wanted to go a little faster I had already had a successful outcome and I knew if I started in my garage but it would take a long time to sort of get the flywheel going so I actually hired several people throw up on the first day and they became my co-founders and there were four of them for sure. The business and we just started working together we actually had a little offense in San Clemente and we took up shop in a basement room we called it the bunker it was about a 10 by 30 room we all have ducks in there together that was day one and we work together like that for probably a year and then we hired one or two three more three more people I think eventually we had 7 Maybe
00:09:18what a pretty small weenie Teen Angel funded and
00:09:24you know when we shared values we just had an articulated them there was a way that we were together already and we realize that if we were going to start hiring people that we would need to put two definitions on them and look icing the core values can be anything that is real and authentic meaning that's probably a hundred Great Value Norm or you could choose from the important part is that you acknowledge them you put a stake in the ground say this is what we believe in and I think the articulation of the values really matters so you can take a generic value like Integrity or empowerment or whatever which is probably those two things are in like four hundred of the Fortune 500 mission statement
00:10:13but if you can define those things in a unique way that is real authentic to your business then it can you knock and can actually work at the case of Stan
00:10:26yeah we I think we operated without articulating them for probably 1 or 2 years and then we got to the hiring process more like we got how about he's an archive where entrepreneurship creativity performance personal responsibility and gratitude and so on the surface they're quite generic but if you talk about entrepreneurship and what it means we tell people hey your personal constitution in creative and resourceful we say you're Savvy approach allows you to get things done with little to no oversight and limited resources and you have a passion for Learning and continuous Improvement and could come up to speed quickly on any topic so now we put a boundary and when we say entrepreneurship that's what we mean so you can imagine now when you doing a one-on-one with anyone in the company it's really easy to say do you live the value of Entrepreneurship as we've articulated it
00:11:25and so on and so forth for each Mark I value I think the other thing that we've spent a lot of time on is integrating the values into the work processes and example of this might be our best value which is gratitude in the way that we would find that is we say you are humble in your Communications and treatment of others you are quick to acknowledge the help and contribution of others you know that your success is not contingent on the failure of others and you're quick to give credit for his old and slow to take it we call that high impact low fingerprint and
00:12:01so now we got this value we've defined it and say we put that to work and it could be Jesus every time and customer service when we speak with one of our suppliers customers sales rep Southfield we're going to send a personal thank-you note
00:12:17and now you can explain why were grateful for that person that interaction and now you've taken a value and you've actually converted into a work process and now it becomes part of the fabric of the bed and the more you can do that and layer those things on throughout your business processes pretty soon the values are actually completely real Inlet think that's the one thing we've done really well with dance we have to find have evolved over the years and two years in Frank Zappa how many employees were you at when he started to really articulate of core values for the business and probably it
00:13:01we are probably at 12 to 15 employees and I think it's somewhere between 20 and 30 employees the culture starts to become self-reinforcing so whatever it is I mean there are values there whether you articulated them or not and whatever they are they start to propagate people start to hire people that are like themselves
00:13:27and whatever becomes the norm in the morning inside the four walls of the business just it grows and continues like a DNA strand you got this like cordian and it starts replicating so I think 10 to 20 people believe it or not it's probably the right time to start articulating it and putting work into it if you let it get to like 50 or a hundred it's sort of you know growing on its own in the wild and you may or may not be able to Wrangle it and in the case of a big business from your employees and the culture become toxic really hard to make a change
00:14:10what do you think about your interview process what are you guys do differently to attract great talent but also also qualify the town to make sure they are a good fit within the within a system of stance shop in San Clemente and I'm from the Bay Area I was born in Walnut Creek crew up there my parents still live there and I think the talent words is real difficult and not going away anytime soon I feel like we were sort of a mini Microsoft in the sense that
00:14:54Microsoft really benefited from being in Redmond for so long tickling the 1890s were they could recruit people out of the valley and once you were there there weren't too many other options to go to so it was hard to get people to Redmond but once he got them they're staying there and that's what about San Clemente that's for us it's hard to get people here but once we get them the turnover is really low people love the lifestyle so the new one was when she got out of the valley our rent is like one tenths the price of San Francisco so we can have a greater investment in our headquarters in the physical facilities
00:15:30left turn over better retention saves with money and teach great talent in the office
00:15:39I'm saying that geography for sure plays a role in our success is a little bit different as well so I think most companies and not included we interview for skills and experience and of course the typical processes we got it a resume and we search for other companies that are like-minded or other work experiences that would fit here and we scream for that and going in that sense we're like every other business we go through a standard interview process where we differ is what someone wants to hire someone in the company
00:16:23they have to have a second interview with one of the original five employees
00:16:29Auto and included in that and for that second interview we actually don't look at the resume and the reason for this is we don't want to be biased by their work experience or their education we really want to rely on understanding what it would feel like to work with this person and my questions for this interview I usually start with something like hey tell me everything about yourself starting with a kindergarten I want to hear how they tell their own life story I want to hear about the challenges I want understand if they keep score I want understand how competitive they are or not and what it feels like to work and then the other question that I might I might have something to do with it sort of like if you were in your ultimate Pinnacle of your career your final resting place you had your dream job what does that look like
00:17:27and you know what at what steps do you think are required to get from where you're at today to where you want to be and then that helps me understand its stance can be a place where they can grow and develop and how long of a fit we will be for their ambition level
00:17:47so these conversations are are more about values there more about gold there more about life overlap and more than anything is like what does it feel like I love it when I can interview someone and I'll say something like yeah I mountain bike ride Surfer I play basketball cuz then I want to go do that thing with them as more revealing about what it feels like to work with someone and playing again the basketball with him instantly shows are they a team player that selfish are they smart can actually did use a lot of things on the court how frustrated do they get when they make a mistake on how did they recover from the steak how long does it take them how much risk do they take by fine when I can get someone out of the office that's even more revealing and depending on the position I'll invest more time with the person you know in out-of-office contact
00:18:47and long and short of it is I feel like when you just look at a resume
00:18:55you sort of abdicated your own decision making to the person that hired them at their last employer to the admissions counselor at the University but maybe they did go to stay bright and so you're so impressed with the fact that they went to this prestigious University that you hire them on that basis
00:19:17but when you really done then and just turned over your own decision making to some college admissions counselor that was just reading an application looking at some grades in a test score versus making your own determination about how they might fit in your business so I'm always weary of
00:19:36you know bringing too much biotin to the interview I want to rely on my own heart and my own intuition and the best way I can do that is to have very little information going into the interview right when I think of Stan Cimarron I think about all of our interactions in the past that I think you're a great communicator and then very transparent in terms of how you feel about your any situation that comes up and would love to you look here a little bit about your internal reviews within stance how they're conducted how you give feedback to to top performers and underperformers as well cuz I think it's a key to key part of that Thai culture within the organization
00:20:15yeah so I'll have my thinking on this happened on one of our Backcountry snowboard trips we were with a bunch of tech Executives out in the backcountry middle of December one year and everyone was fretting over their end-of-year performance reviews with their employees
00:20:36and so the discussion was like you know who's going to get the bone at all I hate these review processes they show up with their Bragg sheets and I have to tell him that they really didn't accomplish everything they thought they did and you know I spend most of my employees home before Christmas you know probably disappointed because they were expecting more than what they got and just overhearing way that these conversations happen it just
00:21:06didn't seem like it was productive so my thought was is first of all the practices and guess what the best practices really mean is what everyone else does so it doesn't mean best it actually means least original it mean safest because everyone's doing it it must be the right thing it's group think that's what best practice means in American business so I'd like to think that the true best practice is original file an original thought means doing something different than everyone else
00:21:53so with that in mind and it's not to be contrarian just to be contrarian it's weave master the basics can we do it in a better way for our people so if we believe that most companies do an annual review process that ends up demoralising their employees making their managers anxious
00:22:18have they really optimized the spirit of encouragement and using compensations reward the best people to get even better Revolt probably not so let's try something different and the worst cases if we fail we can all go back to what everyone else does so when I'm doing anything too radical we said let's put the performance review process in the one-on-one and let's make sure that we're doing one-on-one every single month
00:22:48and a lot of the things we do when we are inspired by their company I love the question out of the culture presentation at Netflix which is sort of like in every one-on-one ask your manager if they would rehire you today at the same pay rate all things being equal now the big completely know everything about you you think about the hiring process companies it's really challenging because most people only interview for 2 3 4 5 6 hours and set the company and then they work at that company for 2 to 5 years
00:23:24so it's sort of like going on a dinner date and then moving in with your partner for the next 5 years
00:23:33big that's a big jump for a very little. Of time to evaluate someone and so long and short of it is we've moved our performance review process into our monthly one-on-one that means we can give raises or bonuses or new stock option granted anytime during the year when the performances warranted and I think the most important thing that it accomplishes is it closes the Gap if I do something great in January I don't have to wait till December to brag to my boss that I did it
00:24:08I actually can get rewarded in January or February and most importantly when we get to the end of the year and we are all hustling to make our numbers and finish out the year and a great way we don't spend two weeks of our time in our two-hour-long closed-door interviews you know specifically going over the performance of every person because we spread that out all during the year so that's our way of doing it we still have a culture of accountability we still consider the leadership of the company the accountability partner of the people on their team that hasn't changed at all but I feel like the end of the year kick-the-can-down-the-road demoralize help your Workforce going into January is not a best practice it's a common practice and not a great one for formers how much time do you give them to to shape up or or ship out how do you enter a dog
00:25:08belated value of ours but I do preach it a lot and it's just the idea of fairness
00:25:13so I don't think it's fair to Blindside someone with a termination when they were never given feedback their performance needed to change I think that's lazy leadership but I think it happens quite frequently and it goes on chat so what we try and train our leaders to do is give the creep the critique along the way to try and help change the trajectory of the performance and whether that requires one month or 3 months or 6 months a lot of business plan pick one two or three years to play out so it might not be fair to say look you've got 3 weeks to change depending on the role but maybe it is fair to say you look at 3 months
00:26:03and these are the results of Jet and objectives that have to be clearly mad 3 months from now and if they're not then we have to make a change and I think that's a very fair conversation and you can have a great conversation about whether those results for achieve do not we have had an example where we had one employee
00:26:28the number of mistakes and failures with other departments with people that he worked with and it was it has become so bad that no one wanted to work with her and so it was really causing a problem in the business and I have gone to the leader and said hey you really need to put in some extra time with this particular employee because he's work needs to atone for your sins and say he's sorry and get a lot better to regain the trust of the people he worked with and that conversation never happened in fact it got worse and worse to the point where finally people are putting their Badges and guns on the table and saying we're not going to work with this guy anymore
00:27:14so it was really broken and Beyond the point of repair so now we're in a difficult position because she's never been given the opportunity to sort of write his wrong and change but the damage is so deep that it can't be repaired so that's what I had to get involved and I basically said look I am so sorry that we didn't give you the feedback that you deserved earlier but I don't see how changing roles or any amount of effort will get us out of where we're at today it's broken and cannot be fixed
00:27:54so what I'm going to do is give you a ridiculous severance package
00:28:00because we're going to Blindside you and then your employment here today
00:28:04and I don't believe in blind fighting this is our mistake I don't believe your family should be blindsided we should have given you this feedback our leadership was lazy we fell short so cuz we can't fix this to end but we're going to take care of you and your family for an extended period of time until you can find a new job
00:28:27and so that could I really transparent how it really goes down sometimes where we made the mistake we could have done better we didn't lead and we did blame side one of our employees but we did our best to honor the principle of fairness
00:28:50people don't do their best work in a culture of beer
00:28:55if everyone is afraid they're going to lose their job or not get their bonus or how their peers are thinking about them it ends up that they played defense the whole time and you want people to play offense to take big bold risks
00:29:10any passionate contributors and no one does that in a Culture of Fear so the problem with blind fighting people in a termination process is it strikes the culture of fear in all the survivors everyone who stayed back is like you I could be fired any time for no reason and given no opportunity to change course
00:29:31which of course is not fair and people want to work in a fair workplace so anyways when did example of what do you think about Schumann resources within a company when is the right time to start building that muscle within an organization how many employees should be at the company when you hire your first head of recruiting your head of talent how do you think about human resources in General on this and maybe it doesn't work in the heart of Silicon Valley where you got a talent War so I would say that is a disclaimer but we believe in what I would call A
00:30:15D concentrated human resource model what most companies do is they hire a head of HR head of talent that sits on the leadership team and
00:30:28is responsible for recruiting onboarding hiring maybe ongoing training maybe even overseas through the leadership team you don't perform interviews in compensation adjustment and everything becomes very centralized what we try and do a decentralized so it's not that we don't believe in HR we just believe that the best HR leaders should be the leaders themselves
00:30:58so who better than to do recruiting then the leader themselves who better than to do training than the leader than Phelps, who better than to make a compensation adjustment leader themselves so my idea is look we're going to put a bigger burden on our leadership team because we want people that can be HR experts in their own right so we do have a central HR function for things like benefits Administration and helping coordinate all of the function but the primary responsibility execute them is at the leadership level
00:31:36and that's how we're different so our HR department by comparison to other companies is very very small but the HR burden is decentralized and Leadership level do you have a philosophy around compensation if this is your in Silicon Valley definitely Warfare town and we seen a number of entrepreneurs do what we consider some pretty crazy things to attract and recruit Talent into the company juva give a strict philosophy around compensation
00:32:12you don't think when you're small compensation ends up being a practical thing which is sort of how much did you make before you got here and how much does the company need to pay the successfully onboard recruit this person and that's typically what you do and eventually if you get to like a hundred people yet to start standardizing things and I think it's you get bigger becomes even more standardized
00:32:36but I do believe, occasionally employees make a normal contribution maybe not even occasionally maybe frequently and the best thing that you can do is instantly reward those things
00:32:50and there's lots of ways to do that right, inflation it's not just cash but it's also bonus it can be incentive stock option Awards of course one story that stand out to me one of my board member shared with me that he had the neighbor and she was in sales at a big software company and every year at the Christmas party he would say the neighborhood Christmas party how are you doing today we're doing great we just got back from our president Club trip to Hawaii for whatever
00:33:27and is you with all is
00:33:31you know the most important thing to her was it she and her husband got to participate in this amazing trip
00:33:38and that actually became a more meaningful part of her compensation like a logically but then any of the rest of the compstak
00:33:47and so is we think about come at Stan I try and get people to think highly creatively I really like it when it happens it doesn't always happen my proudest comp moment it's bands would be one of our hourly employees have worked with us for many years she's still here a fantastic contributor and I noticed that she drove kind of run-down old Audi and it had like Denson the fenders and I even looked in her tires were bald and she didn't care about her car or didn't want to put the money in debit to maintain it so we have a trade show and while she was gone I got the keys from her boyfriend
00:34:33and I took the car to the body shop and I had all the dents fixed I had to completely detailed I put new tires on I had the car serviced at the dealership and we brought back in the whole bill was like three or four thousand dollars but it looks like a brand new car and she cried right so it's finding these unexpected things on your team and now you might say well geez how does a big company with thousands of employees in the nation that has 10 or 12 direct reports that knows what their team will appreciate and goes in and does that one thing
00:35:19the weave done you know Angels tickets for someone that loves the Angels or a wine tasting trip for someone that loves the wine country it's the idea that it doesn't have to be a big thing
00:35:31it can be a small thing so long as it's personal and it's appreciated and those things go a lot longer than any cash what bone is because it's personal it's memorable and other companies are too bureaucratic to operate that way so we're always searching for these one-off random ways to say thank you to people that do great work and to do it in real time not wait for the end of the year and I think we have a number of examples of that I mean we've done this now. Send me the times or hundreds of times
00:36:10and you know it gives people it becomes part of the story of the company gives people for me to talk about them like you remember the time then they did this
00:36:23and yep like cheese that's what makes work fun so I think having flexible compensation and the ability to give a random award that matter in real time is more important than Haley paid in the 75th percentile
00:36:43I'm being faithful about people is what matters
00:36:48I couldn't I couldn't agree more you know I think this this interview today and it was time let you know I think culture the topic of culture within Silicon Valley within the Tech Community is top of mine for everyone so I think your insights here are extremely valuable and just wrapping up are there any words of wisdom that you want to pass along to the next-gen entrepreneur who is the audience of this podcast you think would be beneficial for beneficial for them
00:37:20look I think for me the greatest learning and business
00:37:25and maybe what made stamps special was in my previous businesses I was really architecting everything towards an outcome
00:37:35you know that's the whole point right Silicon Valley venture capitalist and bet they have 10-year life funds expect a return at some point
00:37:43and so you sort of get in the mindset of I'm building something to spell or I'm building something to take public at some point I need to be a recapitalisation and it ends up just being torn about hustle to make money
00:37:58and if you get a really fantastic product Market fit you get the growth and all of that sweater played out but I think more often than not in retrospect it ends up being less enjoyable than it could or should and maybe it's working by his maybe it's life and buy it but I think the advice is that you really do need to enjoy every minute and for me stamp I didn't start stand
00:38:30to make money and it's easy for me to say cuz I had already had an outcome to it really could be the secondary or tertiary motivation
00:38:40but I started it because I wanted a place that I can go to during the day but I would be stimulated by good-natured hard-working ambitious people
00:38:53and I be stimulating conversations I would learn things and we could build something fun and so did you hear all those word none of them have to do with money and so is it if you said hey it's been successful I would say yeah we're successful because every day when we come to work we learn something or challenged we love each other's company we become better people cuz we work with great people like those are benchmarks for Success not an arbitrary growth rate or amount of money we make yes we make money and back I might argue that we've grown faster or made more money
00:39:37then we otherwise would have because
00:39:41all of the primary motivation being window pumping grave
00:39:45tell me about my bike it's simple it's just you got enjoy the process you can't just optimize everything for an outcome enjoy every single day and make it great if it's not that I think he wake up 5 7 10 years later with a pile of money in 10 years of your life wasted will you had an amazing journey my friend to watch along the way and I can't thank you enough for your time today really appreciate it. Jordan always good to speak with you and see you and thanks for having me a play Don't bore all of your lips now I think this is a great the great podcast thank you for your time Jess

Transcribed by algorithms. Report Errata
Disclaimer: The podcast and artwork embedded on this page are from Menlo Ventures, which is the property of its owner and not affiliated with or endorsed by Listen Notes, Inc.

EDIT

Thank you for helping to keep the podcast database up to date.
SPONSORED

RECOMMENDATIONS