EPISODE 016 : 06/24/2021
Matt Blumberg, author of Startup CXO: A Field Guide to Scaling Up Your Company’s Critical Functions and Teams (part 1)
The new book Startup CXO is designed to help each functional leader understand how their function scales, what to anticipate as they scale, and what things to avoid. Matt Blumberg and his team understand the scaling challenges faced by startup executives—they’ve been there and done that multiple times over multiple decades. Along the way they learned what worked and what didn’t work, and they share their lessons learned in Startup CXO.
(Part 1 of 2)
Host: Ned Hayes and Ashley Coates
Guest: Matt Blumberg
Listen to every episode
Topics discussed in this episode
- New book Startup CXO covers all aspects of creating a company in the contemporary era
- Blumberg’s history of entrepreneurial success at multiple startups with multi-million dollar exits
- How Matt brought a team together to create a useful book that contains multiple perspectives from a complete C-level team
- Operating system of successful companies includes processes, best practices and great people
- How startups can win today, in the new world of venture capital and fundraising
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Ned Hayes [00:00:01] Welcome to SparkPlug, where we talk to smart people working at the intersection of business and technology. Brought to you by SnowShoe making mobile location smarter. This is the first part of a two part conversation with Matt Blumberg, the author of Startup CXO, a field guide to scaling up your company’s critical functions and teams. Matt is a serial entrepreneur, successful startup CEO, and he’s drawing on his deep experience to explain the roles and functions of team members and help startups to scale fast.
Ashley Coates [00:00:36] Welcome, Matt! So great to have you. To start off in a nutshell, will you tell us about your journey writing your new book? What’s what’s your story?
Matt Blumberg [00:00:45] I’m happy to give you a little bit of background on me first. I I’ve basically been running tech businesses since 1995, internet businesses since 1995, and I spent the first five years of that sort of during the dot com boom. I’m building an internet business. Inside of another company was a company called Moviephone. If anyone remembers the 777 cell phone service, which have gotten started in the late 80s, I joined the business and started the internet part of the business and was GM of it for 95,6,7,8,9 . After we sold Moviephone to AOL, I left and started a company in the email space called Return Path, which I built over the course of two decades with an amazing team and phenomenal group of investors and board members to a fairly good scale as startups go. We were about 500 people and about 100 million in sales. At the end, we sold that business in 2019, and then a group of us from return got started a new company called Bolster. So spent lots of time building businesses over the years, lots of time mentoring other CEOs as well first time CEOs and early stage CEOs.
Ashley Coates [00:02:05] So your startup history really gave you a range of experience to share with our Spark Plug audience of entrepreneurs and business decision makers. Can you tell us more about what you learned running Return Path? What was Return Path all about?
Matt Blumberg [00:02:21] So the product, a Return Path was a product in the technology space, and it was all about making sure that email didn’t get locked and filtered by mistake, which sounds like a small and quirky thing, but it’s actually a big problem. Any time you go through your spam filter, you probably find five things or 10 things that you should, shouldn’t be there. They should be in your inbox. And for marketers, it’s an enormous problem or media companies that are sending out email to their customers. So we built a fairly significant business that was really a data and analytics business around understanding the scope of the problem and figuring out how to how to solve the problem. So it was a it was a B2B software or SaaS business, heavy, heavy analytics and data science. And I would say the second part of the Return Path story, though, was building the company and building the organization and the culture. And my team and I were just obsessed for 20 years about being a fantastic place to work. We used to say we wanted to be the best job anyone ever had. We were very deliberate and very intentional about scaling ourselves as leaders, about scaling the organization, about not just being a great place to work, but about being a different kind of place to work and really being thoughtful and investing a lot in people’s development and careers and growth. And that part of the story, you know, was very important to who I am as a leader and who our team was. And it led us to do some really interesting things in the workplace and some interesting things along the way, including creating a new company that we spun out of Return Path and turned into a nonprofit that still exists today as an independent nonprofit called Path Forward, which helps it helps moms get back into the workforce after they take a career break and helps work with employers of all sizes to create programs and to sort of change their hiring mindset around that kind of talent. So, so that type of thing was always very top of mind for us. That Return Path and really led to a lot of ways to the founding of Bolster, which is a completely different kind of business. It’s not an email business, it’s a human business.
Ned Hayes [00:04:40] Yeah. Well, back in the 1990s, when you started to the world of software, it was pretty cutthroat. So at that point in time, what you were doing was really changing the game in terms of how you treated people. Could you tell us more about what led to that difference in emphasis?
Matt Blumberg [00:05:00] Yeah, thanks for recognizing that. I always feel like a lot of the things that we did at the end of your Return Path that we do today are kind of table stakes now. Although I don’t think there table stakes, I still think they’re they’re unique. But in 1999, they weren’t they? Really, weren’t it done. And what led to that was the combination of the three jobs that I had had coming out of college before I started Return Path. I worked at three different types of companies. They were all, you know, sort of knowledge, economy type companies, right, management, consulting, venture capital and a pack, a media company. But I noticed across all three that the relationship between the business and the employees was not what it should be. And all three of them kind of said the same had the same language. You know, our people are our most important asset or our assets walked out the door every day at 5 o’clock or something like that. But they didn’t necessarily behave that way. Well they behave that way selectively? You know, sure, they created training programs, but they didn’t trust their employees where they created training programs, but only for senior people. Or they did something, but not something else. And, you know, I just kept in this sort of list in my head, I’m going to start a company someday and we’re going to do this different.
Ned Hayes [00:06:18] So did that lead to the creation of your first book Startup CEO and then this next book, that kind of note taking in that type of notes to yourself about how to do things?
Matt Blumberg [00:06:28] A little bit? Yeah, the the the I started writing a blog in 2003 or 2004, which was pretty early. I mean, blogging sort of started around then and I wrote a blog that’s now called Startup CEO. Com It used to be called only once, and that was about me documenting the experience and and documenting both big things and small things and really wanting to share that the journey and the experience with with others. The original name for the blog only once came from came from another blog post that one of my longtime board members and friends wrote called You’re only a first time CEO Once, which is basically his way of saying it’s OK to make a lot of mistakes. You know, along the way, you’re going to learn as long as you don’t make the mistakes more than more than one or two times each. So the blog, which is now startupCEO.com, has, you know, I don’t know, probably well over a thousand posts in it about the experience and about, you know, sort of how to do different parts of the job. So. So the book startup CEO, which I first came out in 2013 and then I did a second edition last year in 2020, is really a how to guide. It is I like to say it’s the book I wish someone had handed me when I started my company because no one teaches you how to be a CEO of a startup. Someone teaches you how to be the CEO of General Electric because you’re like the number two person and you’re being groomed for the job for years. But, you know, I had had a job of being a GM of the internet business for for four years or five years. Like that sounds like it’s good training for being a CEO until you’re actually a CEO and you realize that you know a few things, but you really only know a few things. So.
Ned Hayes [00:08:13] Right, right. It’s not exactly the same job. And one phrase that you use throughout the book is the operating system of a startup and the way that that that a CEO can kind of set the tone and can set up systems and modify the systems over time to help the company be more effective. And so for you, you’re kind of designing an operating system, as a CEO.
Matt Blumberg [00:08:36] Yeah. And, you know, both a personal operating system, how I’m going to function and then a company operating system, how the company is going to function. And you know, I find that being intentional about, you know, being intentional about that is 80 percent of the battle. And so that’s what startup CEOs all about. It’s, you know, how to do. I think it’s 65 chapters and it’s literally how to do sixty five different facets of the job of CEO.
Ashley Coates [00:09:03] Right? So now that you said this book came out of a blog, and I’m just curious, and this is totally a leading question here, because Ned and I are both big book lovers and needs an author himself. But why write a book? Some people might say that a blog these days would be just as useful. Why do you think that entrepreneurs and business people should be reading books in addition to blogs?
Matt Blumberg [00:09:29] I always have. I’m a voracious reader and you know, I love business books and, you know, I don’t think it’s an either or I think it’s both. Not everything in the book is on my blog, and not everything on the blog is in the book. And there’s, you know, there’s something about that. I, you know, I do plenty of reading on the Kindle, for sure, but there’s something about particularly a reference oriented book, and that’s really what Startup CEO is, right? It’s a sixty five chapter. You know, you don’t have to read it front to back. You can, but it’s not. It’s not a story so much as it is, you know, a series of linked lessons. There’s something about having the the reference book sitting on your desk. And, you know, I talked to CEOs regularly, particularly in my current job, where we’re engaged with startup CEOs all the time, where I’ll get on Zoom with them and they’ll pull out a hard copy of startup CEO with like all the Post-its sticking out of it and pages dog-eared. And you know, I think there’s there’s something, there’s something that’s that’s different about that experience.
Ashley Coates [00:10:31] Absolutely. I couldn’t agree more. I think there’s usually are often say that they often write the book that they wanted to read and sounds like you have that same experience. Yeah. Who do you think the right audiences for this book? Is it only startup CEOs or is there a broader audience that it would it would resonate with as well?
Matt Blumberg [00:10:51] Yeah, I think startup CEO and then, you know, talk about the next book. Startup CEO is for CEOs or people who are on executive teams. And, you know, maybe they’re aspiring CEOs. Maybe they’re brand new executives and they want just more insight into, you know, Hey, what is my boss do all day? And you know, what are the things that he or she is going to care about? And how should I think about that in my own, my own development or my own job?
Ned Hayes [00:11:17] Right? So one thing I found fascinating about this book is that you’re kind of stretching out beyond just the role of the CEO with CXO. You’re covering a number of different roles. So when you thought about this book, I assume that you started consulting people who you respected, who have worked in those roles, right? Is that how the book kind of germinated and came together?
Matt Blumberg [00:11:42] Yeah, the the idea was Startup CXO is, as you said, it’s a book of books. So it’s it’s like a mini version of startup’s CEO for each function in a company or each major leadership function in a company with some upfront material and connective tissue that I wrote to to sort of keep keep the book hanging together. But yeah, I could never have written this book by myself, or it would have taken a really, really long time. The book is actually written by nine or 10 of us. And you’re not allowed to have 10 author names on a book, so it has mine. But each section of the book is written by a different executive with 20 to 30 years of experience running that function. And so so the first 25 chapters are written by Jack Sinclair, who’s a career CFO and also COO. But he was my co-founder both that Return Path and at Bolster and that is 25 chapters of How to be a CFO of a startup. What are the two 25 main things you need to do? And so each section is written by a different person. It’s in a different voice. And what’s interesting about it is everyone who wrote a section or coauthored a section was on the leadership team at Return Path. Many of them are also on the leadership team and the founding team bolster a new company. But that’s not the only experience that all of them had, you know, 20 or 30 years in business. And for the most part, you know, Return Path was five or 10 years of bad. So they have that executive experience at lots of different companies. So it’s interesting when you read different people’s narratives is there’s a piece of each one that kind of hangs together really nicely, but then each one does have its own unique elements. My longtime chief people officer Cathy Holly, who wrote the section, for example, her first job in H.R., was running for a truck stop, and I couldn’t talk about a more different kind of business than working for a tech company. So each of the authors sort of brings their own personal narrative to it, as well as some shared set of experiences.
Ashley Coates [00:13:53] So great, and it really struck me that there was a collaborative process to write this book, and you talk at the beginning about how successful in business is also a collaborative process. It’s not just the CEO making all the decisions, and you mentioned Jack Sinclair and Cathy Holly both wrote sections and Nick Baget and Holly Enarking, wrote the chief marketing officer section. Can you talk to us about that process of recruiting all of these collaborators? You worked with them already, so you have connections with them? And how did that go when you approached them about helping you write this book?
Matt Blumberg [00:14:28] Everyone was really, really excited about the project. You know, people knew about my book when when I described the vision to them, they totally got it. They instantly got it. And they basically said, Look, you know, if your book is, you know, for CEOs and maybe four executives that want to be CEOs, this is a book that’s for not just executives and CEOs, but this is for anyone that wants to become an executive. And, you know, I think each one of them viewed their section as part an opportunity to tell their story, but part as an opportunity to pay it forward. And, you know, the CMO section, which is great, I mean, all the I think all the sections are great. You know, if you are in a marketing department and I’m. And you’re five years out of college and you think, you know, what’s what’s not my next career step, but three career steps from now, maybe I could be the head of marketing somewhere. What are the things that I’m going to have to learn between now and then to to do the job? And how should I steer my own career to do that? So I think everyone is very excited about, you know, sort of telling a uniform story around that. And the collaboration process was really fun. You know, each each other, wrote his or her own section. But we collaborated very heavily upfront on the outline. So what are the topics we’re going to cover? Everybody read all of the things that I wrote and marks that up. I read each of the sections and mark them up. Each section we had outside readers contribute as well. So not just the author, but they went to other people that they had worked with in the past and said, Hey, can you take a look at this? Make sure you think I covered everything and got it balanced. So there were a lot of contributors in the book, and it’s I think it’s going to be a great resource.
Ned Hayes [00:16:10] You’re now running a new company, and some of these people are at Bolster with you, so can you tell us more about Bolster? What’s what’s Bolster’s mission?
Matt Blumberg [00:16:18] Yeah. So Bolster is a marketplace for on demand executive talent. We are a place that startup CEOs can come to find very, very specific talent for their organizations. All of the talent in our marketplace is executive level, so they’re all people that we’ve kind of vetted as an experienced senior executive. And what we really help CEOs do is either fill in holes on their executive team with fractional or interim leadership. We don’t really do full time placement will help them connect to coaches and mentors. And that could be a coach or a mentor for the CEO, him or herself or for someone on a team. You have a head of H.R. and you want them to get better at something. You’re going to find a really experienced chief people officer and Bolster to come help them. We also do searches for independent board members. So if you’re a CEO of an early stage or even a mid-stage growth company, Bolster is the place that we want you to go to start kind of start any search like anytime you need to think about executive level talent yourself or your board. So we have a whole set of software tools in addition to the marketplace around that.
Ashley Coates [00:17:33] And actually, regarding your software tools, one thing you include in the book are a lot of examples from your recent experience helpful staff in terms of the tools that you use. QuickBooks, Gusto, HubSpot.
Matt Blumberg [00:17:45] Yes, right, all the corporate run.
Ashley Coates [00:17:48] Yeah, right. And I’m curious actually on that note, if these are meant to be guidelines and best practices, or if these are simply examples of a good set of tools.
Matt Blumberg [00:17:59] Not necessarily best practices more, we thought that would be an interesting thing to include because we were we were just setting the company up while we were writing the book. And one of the things that struck us, particularly my co-founder Jack, because he and I started Return Path together in 1999. It struck us how different it is starting a company now than it was 20 years ago. And, you know, in the 90s, we spent an enormous amount of money and an enormous amount of time installing all these software systems and building out a data center and servers. And this that the other thing you don’t have to do any of that now. You could start a company now by stitching together a bunch of free SAS applications or startup package, very inexpensive SAS applications, spin up servers on Amazon Web Services, you know, and you can be off to the races. So Jack thought it would be fun to just kind of document that for people who are thinking about starting a business now.
Ned Hayes [00:18:52] Back in the 90s, you used to be able to go raise a seed round or a Series A with a PowerPoint, good idea, maybe a technical co-founder to travel along with you, and now you actually build out your pilot product. You actually talk to customers. You have a functional working thing before you really start raising. And I’m curious how that shift happened from your perspective and what led to that shift?
Matt Blumberg [00:19:21] Which is probably a couple of things. One is, you know, our last conversation, it’s a lot faster and cheaper to start something now, you know, when you don’t have to start by buying a server and putting it in the data center, but you start by getting free Amazon web credits, you know, there’s just a lot less friction in starting a company. And, you know, in the last twenty or 25 years have seen a startup revolution, and there is now a whole generation of people that that know how to do startups that have been part of startups. And you know, that culture is a lot more prevalent and it’s a lot more global and a lot more national. It’s not limited to Silicon Valley or, you know, a little pocket here or there. So, you know, I think the the whole game has changed, but the fundraising game that’s very different to what, well, what we used to call a Series A, it’s like a seed round now or a pre seed round. You know, companies are getting Series A’s that look more like Series Bs and Series Cs of 20 years ago. So, you know, everything evolves.
Ned Hayes [00:20:27] Thanks so much for your time Matt.
Matt Blumberg [00:20:29] Thanks. I appreciate you guys having me.
Ned Hayes [00:20:32] Tune in next week for the second part of our conversation with Matt Blumber, author of Startup CXO. Thanks for listening today to the SparkPlug podcast hosted by me, Ned Hayes, and brought to you by SnowShoes Snow.sh for smarter mobile location, Smart Plug is a wholly owned property of SnowShoe all content. Copyright 2021 SparkPlug Media.