Venture Everywhere Podcast: Ryan Denehy with Fran Brzyski
Fran Brzyski, Co-founder and CEO of Hark catches up with Ryan Denehy, Co-founder and CEO of Electric on episode 29: IT's Electric.
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Episode 29 of Venture Everywhere is hosted by Fran Brzyski, Co-Founder and CEO of Hark, a new CX Channel that facilitates easy post-purchase communication between customers and their preferred brands. Fran engages in a conversation with Ryan Denehy, Founder and CEO of Electric, a company that provides IT management solutions tailored for small businesses lacking in-house IT staff. Electric simplifies IT for businesses by offering services like computer setup, application management, and cybersecurity, making essential tasks easy and accessible. Fran and Ryan share insights from their startup journeys with Hark and Electric, discussing fundraising, customer communication, and the transition from passion projects to strategic business management.
In this episode, you will hear:
Electric's journey from inception to scaling up, including strategic fundraising and navigating the startup financial landscape.
The power of authentic customer communication and capturing their voice across multimedia platforms.
Securing venture capital, launching products and the confidence and resilience required to succeed.
The influence of mentorship on overcoming challenges and accelerating progress.
Challenges in startup hiring, leadership development, their impact on investment prospects, and shaping company culture.
The importance of sales and market traction over just product development.
If you liked this episode, please give us a rating wherever you found us. To learn more about our work, visit Everywhere.vc and subscribe to our Founders Everywhere Substack. You can also follow us on YouTube, LinkedIn and Twitter for regular updates and news.
TRANSCRIPT
00:00:00 Jenny: Hi and welcome to the Everywhere podcast. We're a global community of founders and operators who've come together to support the next generation of builders. So the premise of the podcast is just that, founders interviewing other founders about the trials and tribulations of building a company. Hope you enjoy the episode.
00:00:21 Fran: All right, well, thanks for joining. I'm Fran Brzyski, the co-founder and CEO of Hark, where we are very focused on changing the way customers communicate with their favorite brands. We leverage a lot of video, audio throughout that journey and allow them to provide full context upfront so they feel heard. And our thesis is that by doing so, we can create this customer generated content on demand and really change the way we think about voice of customer within organizations versus just plain text reporting and surveys and things like that.
00:00:48 Fran: We raised a pre seed round that Everywhere Ventures was a part of along with RiverPark and Lightbank, M13, GreenLight Ventures, Reef Ventures, New Strategic Angels, and we actually just concluded a three and a half million oversubscribed seed round where Everywhere Ventures invested in March which is great, was led by the Oceans Ventures, Converge, Atman Capital, and a few others that had come in, which we're really excited about. So the more important person on the podcast today is Ryan, who I'm really excited to chat with, and Ryan, I'll let you take it and talk about Electric and what you're up to.
00:01:17 Ryan: Awesome. Thanks, dude. I wouldn't say I'm a more important person. Actually, since you're asking me the questions, one could argue, you're the more important of the two. But I'll take it. Ryan Denehy, founder and CEO of Electric. We make IT very easy for small businesses. So we're the only IT management solution that's built for companies that don't have in-house IT staff. So whether you need to set up new computers, manage your applications, make sure you don't get hacked, all the basics.
00:01:47 Ryan: We make it super easy and we have everything from freemium products. You can just get started with right off our website onto more robust stuff with value-added services and help desk and things like that. So check us out at electric.ai and it'll probably be the first and last shameless plug for Electric. Let's just get into it.
00:02:09 Fran: Yeah. I mean, but to riff on that, I mean, you're one of the more prominent New York City founders, founded in 2016 Series D. I remember when we met, you were fresh off your last funding round, which I think was, what is it, $60 million?
00:02:22 Ryan: I mean, it's almost embarrassing. Like which, trying to remember what–
00:02:26 Fran: That's amazing, right? So GGV, BVP, Primary, Greenspring, Everywhere Ventures, Fowler Capital, Slack Fund, Vintage, that's pretty incredible. So that's why I'm pumped to talk to you today, because starting from the journey, you were already a successful founder, right? You had two successful exits before you even started Electric right?
00:02:41 Ryan: Totally. Yeah. I mean, things always look a little bit different under the hood than they are in reality. There's this old saying, the first time you have to make someone else rich, right? And that's how my co-founder and I, like our first company went. We started an online ad network when I was in college, raised about a million dollars, sold it for close to seven. We didn't know anything about how to structure term sheets or financings or anything like that.
00:03:01 Ryan: So the vast majority of that money went to somebody else when the business got sold. But great, right? Because for he and I to have gotten jobs at a public company in our early 20s and have the experience that we had there was really awesome. And ultimately set us up really well to start our first SaaS company, which was called Swarm. Started that in 2012. And that was a retail analytics platform for small businesses. And yeah, that was also quite a ride. We raised about $3.5M for that. Ended up having a really successful exit to Groupon a few years later.
00:03:35 Ryan: But, the interesting thing there was the only reason it was a successful exit was because we were so bad at articulating the scale of the business and what it could be that we basically just couldn't raise money. Right? So the roughly $3.5 million that we raised over the life of the company was like tooth and nail. It was the company perpetually being out of money, but those constraints really just forced us to get really, really far with the money that we could raise.
00:04:04 Ryan: And in the end, the category, that retail analytics, place-based analytics category that we were in, produced no winners. There was a company in New York that got started at the exact same time called NOMi and they raised a lot more money than us from some very prominent VCs and was largely a total wipeout. There was another company on the West Coast that raised even more money than all of us. Euclid, also a total wipeout.
00:04:29 Ryan: And so in the end, I think we were the only company of the three that actually delivered meaningful returns on investment for our VCs. But strictly because we didn't raise a lot of money, we were able to generate a fair amount of revenue and build some really cool stuff with the money we did have. And yeah, so really good lessons learned from those first two companies.
00:04:46 Ryan: And then when I moved back to New York in 2016 and started Electric, I felt like I had done enough things wrong that by the time I got Electric off the ground, I'd be able to hopefully skip a few steps. And yeah, I think we did, right? And I think we did pretty well with the market.
00:05:03 Fran: Well, I was going to say the market is very different now than it was. You got Electric off the ground, say it's like 2017, 2018, where you start scaling, market was in a different place than it is now, but you raised, when especially New York City venture capital was much different in the late 2000s, early 2010s.
00:05:19 Fran: I guess from that standpoint, how did you think with Electric of raising those rounds, but having those lessons learned, I guess in mind, like you said, being so prudent with your money and maybe not going after bigger rounds or whatever it might be. Any lessons there that set you up really well?
00:05:34 Ryan: Yeah. I mean, I'm not a technical person. So I really, for my whole career, just had to lean on my go-to-market chops. And ultimately, what I found there is that anyone can ship a product. It doesn't necessarily have to be good, but anyone can ship a product. But actually, getting real traction and showing that there's real demand for a product, that's really the thing that separates the hobbyist founder from you know an investor or prospective candidate you know is going to look at and say, hey, this is a legit company that's going places.
00:06:05 Ryan: And so I would say that's one of the things if you were to make a chart of start, stop, continue, firmly in the green continues. I've always been really sales and go-to-market focused. In the end, I think there's a level of truth that you get to when you wake up every day and look at the scoreboard and it's like, you're either growing or you're not, you're either maniacally focused on getting your product in the hands of new customers or you're not.
00:06:30 Ryan: And one of the biggest lessons I learned, and this I saw when I was in San Francisco building Swarm, was just the number of early seed stage startups that went out of business, somewhere in between raising a friends and family angel round and a proper seed round. Because they were so preoccupied with fundraising that nobody was actually growing the business. And we momentarily fell into that trap.
00:06:56 Ryan: And we had some investor just tell us, he's like, Hey, how come, like sales have been flat the last two months? And we just sort of looked at him and we're like, Oh, we've just been busy fundraising. He's like, that's a horrible excuse.
00:07:06 Fran: Yeah.
00:07:07 Ryan: And the guy wasn't being a jerk, but he was just, “Hey, just do yourselves a favor, don't ever say that in another VC meeting again.” And we sort of walked out and my instinct was, yeah, I looked at my co-founder and I'm like, “Dude that guy's a dick.” And, Rudd looked at me. He's like, “honestly, man, he's completely right.”
00:07:24 Ryan: And so we went back to the office that day and we sat down and, Rudd looked at me and he's just, “all right, dude, here's how this is going to go. Someone needs to run the business and that's going to be you. And someone needs to go raise the money and that's going to be me. So I'm just not going to be around that much for the next month and a half. I need you, going out and signing up customers. I’ll go get us the money.”
00:07:43 Fran: Yeah.
00:07:44 Ryan: A decision made in a split second like that, had Rudd not sat down and just said, all right, you're doing this, I'm doing that, go. We never would have raised money. We never would have gotten the company off the ground. And so there's a bunch of lessons in that, but it's a common pitfall for sure.
00:08:01 Fran: Yeah. Some of the best advice I get is it's very hard to hear. And when you're in the moment, you get that sense of what you just said, wow, that guy's a jerk or whatever, but you digest it. So it's nice to have those people around you that will tell you that. And I think some of the best advisors are the ones that aren't giving the friendly advice only.
00:08:16 Ryan: Well, and Fran, I'm curious from your perspective, right? So one of the things I found super impressive about what you've been able to do over the last couple years, I get emails all the time from people who are like, Hey, I'm thinking about, starting something and this and that. And you're one of the only people I've met in the last couple years where, we’ve gone out, we've gotten coffee, we've done a call, we’ve got breakfast.
00:08:39 Ryan: Fast forward, you've raised millions of dollars from incredible VCs, you've launched a product and you've actually got the company up and running. We'll circle back on that in a second because I’m super impressed. I think I want to hear some of the things you had to get over, some of the twists and turns to get to this point. I think from the perspective of having experienced a lot of this stuff for the first time, can you think of some times where, like you really had to check your ego at the door when you were out trying to get those first dollars into the business?
00:09:08 Fran: Yeah. So to that point, I learned, I thought I was going to come into this world and I'd be egos everywhere. And yes, there's all an ego with everybody for sure, but the best founders are the ones who are just gonna help. You respond to my email, you're like let me get on a call. And you knew this was like an idea on a napkin when I talked to you about it, but you knew I was onto something and you were trying to guide me and you're a super successful dude who made time.
00:09:28 Fran: When we got breakfast, you turned your phone over for an hour and didn't even look at it, which I still remember. And those are the kind of people you try to surround yourselves with who are gonna help you. I think the biggest thing, with the success, is I've been through a lot of times where, I thought I was making it and I wasn't. So I was at a business travel startup, which we actually use Electric. And it's pretty full circle that we're having a conversation now because I remember using your product early days.
00:09:49 Ryan: Oh, that's too funny. Yeah, when you were at Rocketrip, right?
00:09:51 Fran: I was at Rocketrip, yeah. We would joke around and send the lightning bolt to each other when we fixed something, because that's what Electric would do. It's just, it's funny that the culture piece. So that company was great, the leadership was amazing, team was amazing, and then COVID happened. You're like, man, I found something here. And no one was traveling for business and you leave and then you go to another seed stage startup that was hiring way too early.
00:10:12 Fran: And you know that story and we don't have to repeat it, but guy does some really shady stuff and you think you're in a rocket ship and you're not, you come out of that and it's hell, but you realize you had to go through that hell to get the confidence and the courage to go do this. And I think the big thing for me is, I couldn't lose, right? When I went out to raise money, I quit my job and took a second mortgage on the house and I put my family's life on the line.
00:10:31 Fran: I had a wife, I had two kids under four, three kids under five now. There were nights that I was just staring at the TV. I don't know why I would watch this horrible show, Cobra Kai, it was like the Karate Kid on Netflix. It was 2 AM and that was my go-to show to try to clear my head of stuff. And I was just like, what am I doing to my family? But my family had so much trust and faith in me, it was there. So there wasn't an alternative. I wasn't going to lose.
00:10:55 Fran: And I think, again, I've been through startups that, went enterprise too early and caused havoc on the culture. And I think at that point, I've built enough muscle internally to have a gut that would steer me in the right direction. But then I surround myself with people like you, like Neil Capel, like Stephan Cizmar. They've been through that and I'm going to lean on them and tell them, here's where I'm getting, but I need some help.
00:11:14 Fran: And that help changes the whole trajectory of your business. So you can really shortcut things. If you surround yourself with great people, I'm lucky enough that people take an interest to do that. So yeah, we raised the pre-seed and got the product to a point that we had. My big thing was customers that love us. We're building the foundation, the revenue will come, but we need people using us in their workflows every day. And if you can create a product where there's ROI and you're making someone look better in their job. There's something really big and special there.
00:11:43 Fran: And when we had that, we knew that we could go do that next round. No matter what, your metrics aren't here, or your business isn't there. You probably get this, you're not technical. You're this, you're that. it doesn't matter. When you have momentum and you feel that, that will come across. And that's where investors get excited.
00:11:58 Fran: So I think feeling that and understanding that, like I remember when I went out to raise, Neil was like, you're not asking for money, you're giving investors an opportunity to come in. And that's all well and good. I get it. But when you're so early, it's hard to feel that. This time I kind of felt that and it's an interesting switch that happened.
00:12:14 Ryan: Yeah, I mean, the confidence side of it is so huge. There's a palpable difference between someone who walks into a room and just truly believes in the vision of what they're pitching and genuinely feels the momentum and is super jazzed up versus people that are feeling defeated or not that confident. That's going to continue to pay dividends, not just at the early stage, but even later on.
00:12:39 Ryan: I can think of a couple of cases where we would have board meetings and maybe our metrics didn't quite tell the whole story, but the momentum around whether it was a new product launch or how a new selling motion was working or whatever. We had two rounds of financing that were more or less preempted off of the fact that someone sitting in one of our board meetings was like, hey, the quarterly financials don't show it yet, but I'm sitting in the room and I'm hearing the team talk about this.
00:13:08 Ryan: We got to hop on the train now. And I've talked to people who are running public companies. It’s same way. You get out, you do your road show, or you're talking to analysts. And obviously when it's a public company, you really do have to have the numbers to back it up. But when the story and the conviction is really there, it has a geometric impact on your ability to attract capital, attract talent, all that stuff.
00:13:29 Fran: That was an interesting point. I totally get it. There's the Jenny’s and the Scott’s of the world. They are going to bet on the people and they're gonna make their own decision and they're gonna go in and they're gonna go in hard. When you start to get investors like that, that introduce you to people and they pass and they're like, here's why you're wrong that you're passing on this. It's a really interesting thing. And it's a good breed of investors.
00:13:48 Fran: So I've been really fortunate that the people on the cap table have been amazing and they all compliment each other in an interesting way. I think a big thing within the whole business, like one day you're doing great, you're not doing great. You're up and down and I'm curious how you handle this, but you always look back and you're like, those downtimes. You're like, well, thank goodness they happened because if they didn't, I wouldn't be here.
00:14:07 Fran: If that would have been so easy, then like it wouldn't have gotten us to there. And it's hard in the moment to think this is happening for a reason, but it usually does. But for you the two questions I have, your go-to-market focused, like I am, I mean obviously you were in college. When was that switch for you? I'm gonna go start something. I'm not gonna go the corporate life. And then also with that comes a lot of stress. How do you keep pretty level? Because I know how these days go.
00:14:28 Ryan: Well, yeah, I mean, two very good but very different questions I think.
00:14:31 Fran: Yeah.
00:14:32 Ryan: I don't know. I think everyone's wired differently. Obviously, for me, I'm not the type of person who's ever felt any sort of imposter syndrome, probably the opposite in that sense, and that I've had to, I think, rein myself in at points. As a teenager, even just growing up, I just had a real disdain for doing things the way that everybody else did them. I looked at the high achievers in my school and I thumbed my nose at them. Like, that's stupid. Real nice, you get good grades. That's cool, it was just a really dumb way to look at things. It's like, very immature. I absolutely detested team sports of all kinds.
00:15:11 Ryan: And so I was just a little punk. I wanted to skateboard and listen to the Beastie Boys and I carried a video camera around. I wanted to make extreme sports videos, that was kind of my thing. And so I think for me starting my own business, it was never a question. It was like, I'm not going to like, get a job and work for someone. I'm not going to like, make sandwiches at a deli or whatever. Not that there's anything wrong with that. Again, this is my totally immature, 14-year-old mind.
00:15:37 Ryan: And yeah, it just never crossed my mind for a second that I was going to do anything the way society wanted me to do it. It was way too much fun to just do things my own way. And I think what I found as I started to get a little bit older was that the more I followed my passions, the easier it became to find my way in the world. My first business, which is making extreme sports DVDs, that was just an extension of two passions I already had, which was skiing, skateboarding, mountain biking, and filmmaking, right?
00:16:05 Ryan: And then that just over time evolved into then building a website with extreme sports content, then an online sports media ad network, and then da da until we get to where we are today, and then it's building IT management software, but there's actually a logical progression of how that goes over time. But everybody comes at it from their own angle. So yeah, for me, it was just a deeply personal thing growing up of just like I'm going to live life my own way and create everything.
00:16:32 Ryan: So that being said, the second question is dealing with the ups and downs. My whole life has revolved around some sort of extreme sport since I was five, six years old. And so in a lot of ways, the mindset I had skateboarding and riding BMX when I was younger, it's really not all that different when I started my first company. If you think about it, for me, I would go out in my driveway when I was 12 years old and I would just try to land a kickflip for like two hours. And I’d just literally fall flat on my face for hours and hours and hours.
00:17:01 Ryan: It never crossed my mind that I would land to that trick every time. It never crossed my mind that no matter how many times I fell, that I would stop trying. And I was doing all that without... No one's handing me a trophy. There's no game to win. There's no coach barking at me. It was just me going out and being like I want to do this thing and it's going to suck. So I think without realizing it at the time, that hardwired my brain to function exactly the way it needed to function to be an entrepreneur and go start a business.
00:17:32 Ryan: Because then when I started my first company and I was making my mountain biking DVDs, I probably sent out 200 sponsorship proposals and I cold called every single company that I sent a proposal to. And I just got my ass handed to me and it didn't really faze me. And me in high school, I was very shy, very socially awkward. But the second that I looked at these things through the lens of business, and the second you put a phone and a proposal in my hand, all of my social anxiety went out the window.
00:18:02 Ryan: And it didn't matter how pissed off the other person on the other end of the phone was for me calling them 10 times in a week. I’d just hang up the phone laughing well, I guess they're not going to sponsor the movie.
00:18:13 Fran: Yeah. Yeah. So, okay. So that's super interesting. It's like that self-motivation that's kind of in your DNA and you have it or you don't. Like you said, making sandwiches, nothing wrong with that. My first job was, McDonald's, but I found it a bit later than you. So if you take that and you're thinking about your non-technical, I'm non-technical. You're running a massive company that's very technically focused.
00:18:36 Fran: You're getting into sprint planning and road mapping, there's clearly stuff that ignites that passion that you have, and then there's stuff like, I got to do this. How do you get yourself into like, I got to do this. I got to sit down. I got to work. Do you have a coach? Do you work with coaches? I guess, how do you go through that part of it?
00:18:51 Ryan: Yeah, I mean, one of the things I learned in my, by the tail end of my second company was that there's some real luxuries that go along with scale. You hear a lot of founders who, they actually start to test the job when it really turns into a management and operations job.
00:19:09 Fran: Yeah.
00:19:10 Ryan: When you get around, usually around like 50 people is when you start to truly have multiple layers of management, very well-defined departments that all start to have their own culture and stuff like that. And I get why some founders reject that. But to me, that's the ultimate luxury. Honestly, even around like 20, 25 employees. The second you get to a place where you have a layer of management below you, you can really start delegating. Even at 20, 25 people, you're still very much player/coach CEO, but you actually have real leverage beginning to pop.
00:19:42 Ryan: You know, I mean, I remember when we got to, yeah, it was about 20 full-time employees. I was like, this is amazing. I've got a lead over each department of the company and they've got teams below them. And we can make stuff happen really, really quickly. And I don't have to be the driver of every single process there.
00:19:59 Fran: Yeah. I mean, you are getting there. Quite interesting. You're looking at it from a much different lens than I'm at because I'm in the point where you're doing everything. When you're early stage, you're so intrinsically involved with every single part of the business. So there's stuff that you're not excited about.
00:20:12 Ryan: Oh, yeah. Many of the things that I like the most about my job today, and many of the things that I'm the best at today are things that 7 to 10 years ago, I absolutely hated and was terrible at.
00:20:28 Fran: Interesting. Like what? Give me an example.
00:20:31 Ryan: I wish somebody had told me that a long time ago, but like, hey, as an early stage founder, as an entrepreneur, today, you are very good at a number of things and you probably like doing those things. And it's, obviously, it's important to lean into your strengths. However, to be an excellent leader, there's going to be another bucket of things that you may hate and may be very bad at today that you can learn to love and learn to be great at. And so I’ll give you a really good example. In my first company, right after we sold it to USA Today, I had never managed people.
00:21:07 Ryan: My co-founder, he was essentially operating the whole business. My job was really on the business development side. And we sold the business very quickly, became clear that he needed to be focused on other stuff. He wanted me to run a much larger part of the business. And going from gunslinging individual contributor to people manager, I was like, I hate this, this is awful. But very quickly, what I realized is the better I get at managing people, the easier it is for me to bring my ideas to life and the more impact I can have.
00:21:39 Ryan: And management is an art and a science and it's taken me a long time to just even figure out the basics of how to competently manage a team of people. But then as time went on, for example, with Electric, I really struggled in the early years of Electric to know how to effectively manage my product and engineering leaders. Fortunately, I have a phenomenal CTO who's been with me for many years now. And I've helped him get really smart on the commercial sides of our business. And he's really helped me understand a lot of the ins and outs of R&D management. And now I really like that stuff. And I really love spending time in that side of the business.
00:22:17 Ryan: Recruiting is another one. I hated recruiting. I absolutely hated it. And as you know, any investor and any advisor is going to tell you, hey, one of your main jobs as a startup founder is you have to be an amazing recruiter. I was not amazing. And it was definitely a lot of trial and error in the early years of making some really bad hires and taking way too long to make those hires. And every mistake you could possibly make. Now, look, I'd prefer to not have to do a lot of recruiting, but it's inevitable that as the company grows, you're going to need to bring in new people or you're going to replace people, whatever.
00:22:53 Ryan: But now it's something where I feel like I have it so dialed in. But when we need to go make a key hire in a certain area. I've got a playbook that works really well. I just know how to run it. And I know we're going to find somebody great.
00:23:04 Fran: Yeah. I guess with the recruiting, you naturally had in the way that you could attract acquisition, the way you could attract investors and money, you could lay out the vision and I remember you telling me when you first met me I was talking about a point solution, you were like, you need to figure out this big thing at the end of the road because it's not evident and you really unlocked that actually for me.
00:23:22 Fran: But the recruiting part is hard, especially as a go-to-market person, you're recruiting a lot for like a technical side of the business. How did you hone on that side of the skill of? I guess it's a lot of trial and error, as you said, but it's like, look, I'm going out recruiting and we're hiring our engineering tech lead. And I have a co-founder who’s very technical, but what are those things you specifically look out for to know the culture piece? Like this person's gonna be a self-starter. I'm pretty confident they're gonna be a good contributor to the business.
00:23:47 Ryan: Yeah, I mean, stage fit is the lazy, but highly effective way to look at it. Generally speaking, particularly in earlier stage companies, so like sub 15 million-ish, honestly, even sub 100 million, the vast majority of the time I've had more success with people that are slightly more junior, but really high capacity, high intellect, great work ethic, slightly more junior stretching up than going for that more senior hire and having them stretch down.
00:24:17 Fran: Yeah.
00:24:18 Ryan: It often does not work. And you see that all the time. Company raises a big round, oh yeah, we just brought in this CRO, he built such and such team at Salesforce and then nine months later, it's like, how's your CRO doing? No, he's out. It was a bad fit. Great guy. We just couldn't get it. It's like, You hear that story all the time.
00:24:34 Fran: Yeah.
00:24:35 Ryan: It's in any role. Stage fit’s a huge one. For product and engineering. Zach Weinberg gave me really good advice years ago. He's like, look, when you're interviewing heads of product or CTO or something like that, you're going to have a bunch of meetings and they're going to learn a lot about the company, but they're going to need to ask you a lot of questions so that they can independently come up with their view of your business.
00:24:55 Ryan: In your final interview, it should just be, hey, come back in a week or two and just, lay out the roadmap as you see it based on everything you know now. Just show me what the roadmap is. Things like that tend to be really effective. Too many interviews are hypothetical pageantry. Reality is if you actually just talk to the person as if they already work for you and you treat the interview just as a meeting, with a new hire, and you look at it through that lens, what I started to find is that even a lot of the people who interview well and have the right credentials are not people that I want to work with. Particularly with the smaller you are as a company, the more important each hire is because they just represent a bigger and bigger percentage of your overall headcount and you're going to make mistakes, but getting those things right or at least getting them more right is so critical.
00:25:44 Ryan: Because you know, you're trying to scale your business now. I can't tell you how many companies I've seen that are between Seed and Series A where the founder delegates away too much of the go-to-market too quickly, brings in some VP of sales.
00:25:56 Fran: At Seed?
00:25:57 Ryan: Well, it's like between Seed and Series A, right? So maybe you're doing a few hundred thousand, three, five hundred thousand in ARR. And so then you, depending on the ACVs, maybe that you bring in, maybe to director of sales or VP of sales. But I've seen this a handful of times where bring that person in too early, you delegate too much too quickly, that person ends up being the wrong fit. And then a year later, you can't raise the Series A. And when your business is that small, yes, it might be because you had a bad hire, but it actually just looks like your business isn't good.
00:26:28 Fran: Right.
00:26:29 Ryan: So these things can have a pretty dramatic impact on how the outside world views your company.
00:26:34 Fran: So you talked about in the interviewing, would you want to work with this person or not? What about on your side? You've attracted a great team. And if that team was out at an event, right? They're at an Everywhere Ventures dinner that you're not at and they're having drinks or food with people and they're like, hey, what's it like working at Electric? A lot of that question is what's it like working for Ryan? What would you hope the sentiment there would be? What would be your ideal, wow, they said about me, that would be great.
00:26:58 Ryan: I would hope that everyone who works for me thinks that A, it's fun working here. B, that it's challenging within reason, and C that I pushed them without micromanaging.
00:27:13 Fran: Yeah.
00:27:14 Ryan: Generally speaking, it wasn't always that way, I've had to grow up and evolve a lot as a leader, particularly in Electric, just because of how quickly we grew and the seniority of people that I had to hire. But what I've noticed is that when I've made the wrong hires or I've had people on the team who are a bad fit, I become a significantly worse leader. And the inverse is true too. When you hire really great people, it's this cheat code, you end up being better at your job. And I'll give you a good example.
00:27:44 Ryan: We had a couple of executives that we had to let go of at the end of 2022. They were the right fit at one point in the company, but the company had grown pretty far past, I think, their useful skill set. And so what ended up happening is when you've got people who are consistently missing their goals, can't effectively explain a way to get back on track and can't really articulate in a reasonable manner what the go-forward plans are, but yet they are adamant that they are the right person for the job and concurrently have a track record of historically being the right person for the job. It makes you feel like a really shitty leader.
00:28:26 Ryan: It's those days where you just go home at night and you're like, I don't know what the problem is. I suck. We're missing our numbers, my team doesn't have any good answers and everyone's arguing. It's one of those things where… then you can go down this rabbit hole of doing all these different management frameworks and team building. It's a nightmare. And often, it ends up being that you just don't have the right people in the right seat for what the company needs today.
00:28:55 Fran: Yeah.
00:28:56 Ryan: And you get some new people in there and all of a sudden you're like, oh, wait, to the right person, I don't even have to explain it. They're just coming to you with the answers and that's not unique to any stage, but definitely there's going to be times where, it sounds awful, but the problem actually isn't you, but it's going to feel like it's you and you have to really question knowing what you know now, would you hire this person to do this job today? And more often than not, when you're having that feeling, it may be that you need to make a change.
00:29:24 Fran: Yeah. I think what it comes back to is… The leadership I’ve always been attracted to. And what I hope to be as we grow is Jocko Willink, Extreme Ownership, which you just talked about. Okay. Things aren't going well. It's on me. Things are going well. It's the team.
00:29:36 Ryan: Yes.
00:29:37 Fran: And I think that's what people are really, really attracted to. We’ve a guy now, we hired him because he was like, I can't go back to what I was doing before, because this is so much fun, I need to help build here. He tells me like, why are you doing this? This is horrible. I'm like, thank you. I know I'm horrible at the website copy. That's on me. And he's gonna make it so much better. So that part's fun. You're like, yes, that's exactly what I need. It is horrible. Thanks for telling me. And he's gonna do a hundred times better of a job than I could.
00:30:00 Ryan: Yeah.
00:30:00 Fran: And I'll learn from that. We go into the speed round. Outside of this podcast, what is the podcast that you are specifically enjoying at the moment?
00:30:09 Ryan: You know, I have not been doing a lot of podcasts lately, but I've just been crushing audio books.
00:30:15 Fran: I was going to say, don't you ride your bike, five hours a day? Yeah.
00:30:18 Ryan: Oh yeah. I'm blasting either house music or rap when I'm on my road bike. No, actually, I just finished reading a book. There was an old Twitter account called Goldman Sachs Elevator. And a guy wrote a book. I mean, it's a cheap thrill, but I just wrapped that one up.
00:30:35 Fran: That's funny. Nice. If you could live anywhere, not in the country, but in the world, where would that be for one year and come back?
00:30:43 Ryan: Yeah, I mean, I love where I live now. So I think I would have a hard time leaving the state of New York, either the city or out here on beautiful Long Island. But for one year, hmm. I mean, if I could do it and come back, probably Japan.
00:30:58 Fran: Oh, wow, nice. By the way, are you in the Hamptons?
00:31:01 Ryan: I am.
00:31:02 Fran: I'm in Huntington. I'm not too far.
00:31:03 Fran: Okay. Third one out of the four. If you could book any artist to headline the next Electric annual meeting party, who would that be?
00:31:12 Ryan: Okay. So that's a toss up you'll see what generation I'm from with this. I think Deadmau5 would probably be up there for me. I've seen them live, probably like eight or nine times, but yeah.
00:31:25 Fran: I love it. I was thinking on my side, Swedish House Mafia would come back. I saw them once.
00:31:30 Ryan: Yeah. I mean, I think they're going to be one of those groups that's perpetually, every three years has a farewell tour and then they need some more money. So they come back. Okay. One more time.
00:31:40 Fran: Yeah. One more round. All right, man. If anyone's listening, they want to reach out to you. What's the best way to find you?
00:31:44 Ryan: I mean, I don't keep a super low profile. So @DenehyXXL on Twitter, Ryan@electric.ai, so yeah, reach out.
00:31:53 Fran: Dude, awesome time. Thank you for the chat. Appreciate you.
00:31:56 Ryan: Fran, thank you so much.
00:31:59 Scott Harley: Thanks for joining us and hope you enjoyed today's episode. For those of you listening, you might also be interested to learn more about Everywhere. We're a first-check pre-seed fund that does exactly that, invests everywhere. We're a community of 500 founders and operators, and we've invested in over 250 companies around the globe. Find us at our website, Everywhere.VC, on LinkedIn, and through our regular founder spotlights on Substack. Be sure to subscribe, and we'll catch you on the next episode.
Check out Fran Brzyski in Founders Everywhere.