Venture Everywhere Podcast: Sam Hodges with Angela Prince
Angela Prince, former CEO of Climb Credit, founder of Orchard (acquired by Kabbage), & LP of Everywhere Ventures, chats with Sam Hodges, co-founder & CEO of Vouch on episode 26: Vouching for Founders.
Listen on Apple & Spotify!
In episode 26 of Venture Everywhere, Angela Prince, former CEO of Climb Credit, founder of Orchard (acquired by Kabbage), and LP of Everywhere Ventures, chats with Sam Hodges, co-founder and CEO of Vouch – a tech-driven commercial insurance business. Vouch’s platform offers digital insurance coverage that can be activated swiftly to ensure a seamless experience from the initial sign up process to handling claims. Prior to Vouch, Sam co-founded and built the US business for Funding Circle, a global marketplace for small business loans. With two decades of entrepreneurship and investment under his belt, Sam has effectively positioned the company as a disruptive force in commercial insurance by using technology to meet the distinct needs of startups and high-growth businesses.
In this episode, you will hear:
Vouch's focus on insuring startups and assisting entrepreneurs in managing their crucial risks.The need for product evolution and broadening service offerings to cater diverse company sizes and types.
Vouch’s potential in the commercial property and casualty insurance market, with opportunities for innovation and distribution.
Understanding different stages of businesses and the company culture to thrive.
Addressing AI-specific risks for companies and ensuring appropriate insurance coverage and risk management.
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 Angela: Hi everyone, my name is Angela Prince and I am the former CEO of Climb Credit, which was a lending and payments platform focused on vocational education. I’m also an LP in Everywhere Ventures and I’m excited to be here today with Sam Hodges, an old friend of mine and the CEO of Vouch.
00:00:39 Sam: Angela, great to see you again. I'm Sam Hodges. I'm the co-founder and CEO of Vouch. Vouch is a technology-enabled commercial insurance business. We're about six years into it. And prior to this, I co-founded and built the US business for Funding Circle, which was, and is a global marketplace for small business loans. And so, yeah, Angela, you and I have got a lot of good war stories about old FinTech and alternative lending land.
00:01:02 Angela: Yes. FinTech 1.0. I don't know what we're on now, but I could say we were both part of 1.0.
00:01:10 Sam: For sure.
00:01:11 Angela: So jumping in, tell us a little bit more about Vouch. What do you guys do? How did you come up with the idea and how has it evolved over the last six years?
00:01:20 Sam: So Vouch is a tech driven insurance company focused on serving the insurance coverage and risk management needs of other high growth and innovative companies. We started working on the business in the summer of 2018. Travis, my co-founder and I, and our early backers at Ribbit and a few other folks who run the business were really excited about two themes.
00:01:39 Sam: The first was we saw a huge opportunity in serving the needs of startup and scale up companies. Almost by their definition, these businesses are underserved. I'd seen that as an entrepreneur. I'd seen it across literally dozens of companies where I'd been involved as an investor or an advisor. Ribbit and Travis had kind of their own views on that problem as well.
00:01:58 Sam: And our belief was that if you could get really good at serving the innovation space, not only was that a really interesting market in its own right, but it was also a very powerful wedge into the broader commercial property and casualty insurance market. And that's really the second insight I think, which is when you look out across the insurance landscape, I mean, commercial P&C is close to $400 billion in spend per year here in the United States. And it's an incredibly fragmented and pretty old fashioned market in many pockets.
00:02:29 Sam: There are many multi-billion dollar enterprise value companies who serve these needs. And most of them aren't household names. So you have this really interesting, large fragmented old fashioned industry. And we've seen the opportunity to bring technology and also insurance product innovation to meeting some unique and interesting emerging coverage needs.
00:02:49 Angela: So a lot of your customers are startups. Do you feel like that's a strategic strength for you since you are a startup yourself and are familiar with startups, like to then be serving the community that you're so familiar with?
00:03:03 Sam: We absolutely are thrilled to be serving the insurance needs of startups. And that is absolutely Vouch’s bread and butter today. And when I think about, the purpose of our work, it's really about helping company builders and entrepreneurs and leaders really understand and manage some of their most important risks. And so absolutely, I think our understanding of what it takes to build a successful startup company across all phases and a set of unique insights we have around that journey and some of the risks one often time faces along the way, that really was a formative part of why we're doing Vouch and why we're doing it the way we are.
00:03:37 Angela: Yeah, I was actually advising a company about six months ago, and it was a FinTech business, and we were going through, I think, getting a license, one of the credit bureaus, and they asked for our insurance, and we didn't have any yet, because the company just started. And I remember everyone was sitting around like, okay, do we call someone? And the CEO had met you and he was like, “I think Vouch might be it.” And we had insurance, I don't know, within a day.
00:04:04 Angela: It was all very easy. But I remember that and thinking, oh, wow, that definitely is serving a need. A lot of times when you find out you need insurance, you don't have a lot of time to get it and you don't want to have to call up a broker and then go through, you know, the faster you can do it, the better.
00:04:19 Sam: Look, I love hearing stories like that and absolutely taking out the friction on the front end of insurance experience. Absolutely it's a vital part of what we're doing. I mean, you and I both know as an entrepreneur, or an exec building a high growth business, your most scarce commodity is time. And so anything you can do to make sure you're delivering the right product or service quickly and efficiently in a way that's contextualized for those needs, vital.
00:04:44 Sam: And we certainly see that opportunity in insurance, that's what we're all about. I'd also add that insurance needs for high growth companies, particularly ones that are driving innovation, whether that's in categories like AI or Web3, biotech, health and life sciences, consumer products, there are all sorts of really complex risks that a first time entrepreneur may not really understand.
00:05:06 Sam: There are risks around the products you're delivering, the risks around the client base you serve, there are certainly risks around how you manage your capital structure and investors. And also there are a lot of people related risks. And so the more we can do to help a company really understand that, transfer away some of the risks so that you can really focus in on the things that will make your company great. That's kind of core to what we're all about.
00:05:25 Angela: Right. And so you guys have raised a decent amount of capital at this point, I think I saw 160 million.
00:05:32 Sam: Yeah.
00:05:33 Angela: That's very impressive. But you've been operating in some of the choppy waters that I think all of us entrepreneurs have been navigating the last few years. How has that shaped the market challenges and operating as a relatively later stage business in such a different market than it was maybe three or four years ago?
00:05:53 Sam: Well, I'd be the first to admit it's been turbulent waters for the last couple of years. But I mean, I also think that's part and parcel building a company really in any environment, you've got to be responsive and play the field as it is. We started a year before COVID. In effect, we launched in the fall of 2019. And so we were only six or so months into it before we told the whole team, “Hey, by the way, we may not be coming back into our offices anytime soon.” And so you have that kind of early on.
00:06:18 Sam: We obviously had all the wildness in the venture market and financing market in 2020 and 2021. And so we certainly tried to position the business in a way that would take advantage of that market upwelling. At the same time, we have been and continue to try to build Vouch in kind of an all weather fashion. One where we really focused on the fundamentals around growth, but growth that's profitable and done efficiently.
00:06:39 Sam: And so absolutely as we look forward, there are certainly some challenges around building a mid-stage private company that still requires capital to get it where we wanna go. I think in our case, we've been really lucky because we have a set of investors and board members who I think share our long-term vision for the business and see some of the differentiation we're building into our model.
00:06:59 Angela: That's great. Congratulations on all of that. Also being a CEO during the early COVID days, it was complicated. And I remember that my company was a little further along, but the friends who had just founded companies, it was sort of like, uh-oh, this is gonna be hard enough.
00:07:17 Sam: Completely. It was... I mean, it's been a pretty interesting obstacle course or decathlon for the last five years
00:07:22 Angela: Yeah, but clearly you're navigating it really well, which is great. I wanted to ask you a question: this is your second company you founded, right?
00:07:30 Sam: Yes.
00:07:31 Angela: So how would you say the experience of founding a company for a second time relates to the first time?
00:07:39 Sam: Angela, you've got to answer this one as well, because you've done the entrepreneurship that is a couple of times too. For my part, I do think you get better as an entrepreneur in lots of ways, but in certain areas, there also are areas you can't gloss over that frankly are hard no matter what. I think the reality is in the early days when you're really around finding product market fit in your business and building your early team and setting the culture up in a way that's robust and aligned with what you're trying to achieve.
00:08:02 Sam: Those things are always hard, whether you're an experienced founder or not. And it really merits the time and thought to really try to get those things right. Now, I will say this time around, a couple of big differences for me at least. One is, I think I just trust my own instincts more. I think the first time around when we were building Funding Circle, I would analyze things in an incredibly detailed way, trying to make sure I got to the right answer.
00:08:26 Sam: And I think I'm a lot more confident this time around doing a bit of work, but then really trusting my gut and trying to move forward. And I do think particularly since pace is so important in building a startup, that combination of, trust your instincts, but make sure your instincts are informed is really useful. And then the other piece that I think I've gotten a lot better at as an entrepreneur and as a leader is just to be a little less emotionally levered to the day to day. The roller coaster of building a company is always a roller coaster.
00:08:53 Sam: But if you're on your own emotional roller coaster, that's on top of that. The highs are exceptionally high and the lows are really hard to deal with. And so I do think there's something around just bringing that in a little bit where you're still enjoying the journey and you're still stressed about the things you should be stressed about, but perhaps a little bit levered to the smaller medium sized things so you can focus in on the big things. For me, that's been a good change this go.
00:09:15 Angela: For that last piece, around managing the emotions, do you think that just doing it again and again is the answer? Or are there techniques or some tricks that you've learned along the way to help you see the big picture, not sweat the small stuff?
00:09:30 Sam: For me, I think it is both a combination of experience, right, because I think you start to have more confidence in your own competence. You've seen more, and so it's easier to decipher things that really matter versus small things that water off the back, so to speak. The other piece though is honestly part of it is just being a slightly older and more mature. I'm in my 40s. I have young kids. I have a slightly different perspective on life now than when I was 27 and sleeping in the office from time to time.
00:09:56 Sam: And so I think that is in general a healthy transition. I will say sometimes I feel like I have way more pressures on my time. And that I think is actually one aspect that is harder about building a company when you're a little bit further along than when, again, you don't have any other real commitments.
00:10:12 Angela: It's interesting now, I'm also in my forties and have small children and thinking about before I had kids and like, what did I do with all of my time? How did I actually fill it in? I found that I became more efficient in some ways when it was like the day ends at six and there's not really a lot of negotiating around that. So my meetings have to end on time.
00:10:34 Sam: Yep. And you get more disciplined around where you spend your time. Good news is I think that with just a slightly more experience and maturity, you also have better judgment around what's really important versus what's purely optional and/or frankly a tax on your time.
00:10:47 Angela: So your first company was in lending.
00:10:49 Sam: Yes.
00:10:50 Angela: Now Vouch’s in insurance, how do those industries compare? Are they equally challenging to navigate or do you find them unique?
00:10:59 Sam: Yeah, so they rhyme. And particularly if you're building a tech-driven insurance product or lending company, where you actually are building the product itself, going through the regulatory approvals and taking some degree of underwriting risk, whether directly or through exposure to fluctuations in the capital markets, I do think that there are certain principles that hold. A big one is really being thoughtful about how much risk you're taking relative to the scale of your book or portfolio. And thinking a lot about volatility.
00:11:26 Sam: Obviously disciplines around getting the balance between moving quickly, but also not having major foot faults from a regulatory compliance perspective and making sure again, your infrastructure is built the right way and your team is built the right way. I think those things rhyme in both instances, particularly early on, almost by definition, you're going to be pretty dependent on third-party risk capital.
00:11:47 Sam: In the case of lending, it's access to the wholesale finance market and institutional funds of various sorts. Also the ability to build up, retail network, which is what we did at Funding Circle. In insurance, it's very much access to the reinsurance market. And again, those sorts of stakeholders to a business, they may be focused on different things because the products work differently. But at a conceptual level, again, the way those relationships need to be set up and managed is pretty similar.
00:12:11 Angela: And you feel that your experience in lending was helpful to being able to start Vouch and navigate the insurance industry?
00:12:20 Sam: Absolutely. Yeah. And again, I won't claim that I am a world expert on insurance by any means. I'm very lucky in that we have a world-class team that we've built up. But I do think certain disciplines around, how do you get the balance right between operational efficiency and underwriting quality? How do you think about the balance between client experience and fraud prevention? Those are things which are pretty similar across those domains.
00:12:43 Angela: I think that's one of the great things about FinTech in general is that once you learn one domain, whether it's lending, payments, insurance, whatever it is, learning the next one is almost like learning a language, right, is a little bit easier because there are these broad concepts that remain true amongst all of them around risk management, downside protection, and regulatory overhang. And not being scared of all the jargon.
00:13:08 Angela: I haven't worked in insurance, but I don't know if this happens there, but I know in lending and credit, one of the things I'd always have to tell new employees is, it's okay to ask what words mean. Because we use a lot of words that don't need to be their own words, but the finance industry has decided that they should be.
00:13:25 Sam: I think in every domain, you have communities of practice who develop their own language and vernacular and subcultures. And I think that maybe the meta principle here is to build a company in FinTech or InsurTech, you have to be sufficiently good in multiple disciplines and aware that they all really matter.
00:13:44 Sam: You have to get your technology people working really well with your underwriting people and your actual financial product development people or insurance product development people. And you need both to be growing in the same direction. And just that appreciation alone, I think sets you apart from people who are purely cut from the cloth of one discipline.
00:14:00 Angela: Absolutely. I always found that one of the hardest bridges for people to cross was people that were technologists who had maybe worked more in SaaS or less regulated industries, who are coming to be on a technology team in a FinTech business or InsurTech or whatever, where the regulation and the bar to mistakes has to be a lot lower.
00:14:22 Angela: And that can often be frustrating for people who wanna just code and push it and let's see what happens. We can't just see what happens here. We're dealing with other people's money.
00:14:31 Sam: And it's multi-dimensional chess, right? It's, you gotta understand if you move the piece over here, what are the different aspects of that that you need to keep in mind? And the reality is in financial services or insurance, there are just more things you need to balance.
00:14:42 Sam: I still think you can build great venture backable, venture scale businesses with terrific outcomes, but I do think it's a narrower path than in certain other categories.
00:14:51 Angela: So the insurance industry itself is very large and very competitive. And you mentioned at the beginning that there's a lot of really big companies that are doing what you do. How have you navigated that and built a business that has competitive products that people know about, but that you're going up against these goliaths.
00:15:10 Sam: Absolutely. Well, first, you have to start with an appreciation for what incumbents have that you don't. What incumbents have are, obviously, wide range of existing products and all the regulatory approvals that come with that. They have deep distribution relationships. They have scale advantages, including capital advantages. And so when you're going up against that, you have to find pockets in the market where your advantages as a younger company are going to be relevant.
00:15:35 Sam: And again, that's why I think starting with startups as the first market we chose to pursue was really important. And it's simply because startups were underserved and also mispriced. So there was an opportunity to go in and get the flywheel going in terms of building up our own advantages with respects to how we're using technology to deliver great digital experiences, but also to take out some of the frictions associated with insurance product development, configuration, deployment itself. It allowed us to build up our own defensibility in terms of alternative distributions.
00:16:07 Sam: One thing we've been very focused on is building relationships with partners like Brex, Ramp, Mercury, Carta, WeWork, many others. All of these affinity partners, who give us unique access into serving their end clients because those clients oftentimes do have insurance needs and those partners have visibility into those insurance needs. And so we've built our own personal distribution from the get-go.
00:16:31 Sam: And then I also think that there's something around simply by starting at this with fresh eyes, you see opportunities that the big folks might just gloss over. If you're running one of the mega insurance companies, say Chubb on the carrier side or Marsh or Aon on the distribution side, the reality is to move the needle for business at that scale. You need to do things that generate billions in premium.
00:16:54 Sam: The incentives aren't set up the right way. It's not gonna get the attention of really senior people within the team. And so I do think there are many advantages one has as a younger fast moving company, particularly in terms of picking off some of these opportunities that just right now aren't quite big enough for the big guys.
00:17:11 Angela: Have you had to evolve your product and offering as the companies that you're supporting are evolving and growing? So I imagine over six years, some of the earlier startups that you maybe worked with in your early days could be really huge companies at this point.
00:17:28 Sam: So, yeah, short answer is they are. We've had multiple companies go from being little baby startups who maybe spend 500 or a few thousand dollars a year with us to now some of those clients spend half a million dollars a year with Vouch. And so landing a client when they're small and then growing with them as they themselves grow, that's been a really core part of our strategy from day zero.
00:17:48 Sam: In terms of our ability to do it, it really came down to three things. And there have been a couple of very specific inflection points in our journey around this expansion and aperture. The first is we needed to evolve our products themselves. And part of that was getting our reinsurance partners comfortable with our underwriting aperture and the exposure base of the size of companies we were dealing with. And so that's broadened pretty materially over the last couple of years as our book has gotten bigger and as we've proven out, we know what we're actually doing.
00:18:14 Sam: The second thing that has needed to change is our service offering. And so today, we actually have two verticals within the business that we run on these pretty distinct teams. We have our Vouch classic offering, which is focused on younger companies, typically companies that have raised less than 25 million in capital. For them, it's really around getting the coverage right, but also making that experience as friction-free as possible. And it's very much a product-led motion with expertise when you need it.
00:18:41 Sam: But then upmarket, we have very much an expertise-led motion. And it's what we call our horizon segment. And that's where, again, we are delivering a lot of the same services that a broker traditionally would have delivered for these businesses. In addition to what a broker can do, we also obviously have our own insurance products, which are tailor-built for these sorts of companies. And so that intersection, the horizon offering with, again, those brokerage capabilities, plus at our core, our insurance products, that's been a really big unlock for us as well.
00:19:09 Angela: That makes so much sense because the broker, I remember back at Orchard day zero, getting an insurance broker. And I'm like, this doesn't feel like I need to have another human involved here. Feels like I should be just checking a box.
00:19:21 Sam: I think if you were to go and put a couple beers into most people who work at the large brokerages, they'd be the first to admit that they have no business going in serving early stage startups either. Now, there obviously are some exceptions. But for the most part, brokers are chasing the mega accounts. And the reason for that is things the brokers are good at, very well meet the needs of a company that has 5,000 employees and is listed on a public exchange. Those needs are wildly different than the needs of a 50 or 200 person or let alone two person company.
00:19:48 Angela: And so what is the ultimate long-term vision for Vouch?
00:19:52 Sam: Well, so we see a tremendous opportunity in the commercial property and casualty insurance market. We started with this early wedge of young startups. We've successfully expanded the aperture of what we can do. And we're in a moment where we're spending a lot of time thinking about how, can we take the capabilities and momentum we've generated and take that and translate it to other vertical markets and other distribution opportunities that we see in the market.
00:20:14 Sam: At our core, we think of Vouch as being really good at insurance product innovation. And there are multiple different examples that I can point to. For example, what we've done on the Web3 space where we've recently announced in terms of how we serve clients who are leveraging AI and specifically generative AI in their business models. Some endorsements we've built specifically for digital health.
00:20:34 Sam: And there's so many opportunities like that, where there are specific risks that companies really need to have covered properly, where frankly, the incumbents aren't serving them well. And so that's really the name of the game, continue to drive insurance innovation, broaden distribution. And I think if we can do that, we can keep compounding the business for a long time to come.
00:20:52 Angela: What's an example of a risk that an AI company needs to be thinking about that they may not realize or that maybe the traditional products don't cover?
00:21:02 Sam: I'll start by saying that I am very bullish on AI as a general theme. I think there's a huge amount of substance and I think it's still very much, early days. I should also disclose that my wife is an executive at OpenAI. So we are...
00:21:12 Angela: Oh really.
00:21:13 Sam: We talk about this stuff a lot at home. I'm very excited for her work. I'm very excited for them. I'm very excited for a lot of other companies in this space.
00:21:19 Angela: So there's been a lot of excitement in your household in the last six months.
00:21:22 Sam: 2023 was an interesting year, put it that way. Looking forward, I'll say, anytime you have a shift in technology or a shift in the way the economy works, there are risks that pop up that require coverage. And insurance as an industry needs to evolve in order to understand and manage those risks. So when people talk about risk in AI, I think a lot of people go to the science fiction-y scary scenarios like what if, this turns into Terminator, right, Skynet and all that. I'm not a futurist, I'm not going to pretend to be a futurist. That's not what we're focused on right now.
00:21:55 Sam: AI alignment is a massively important field and there are a lot of really smart people working on that. In the shorter term though we think a lot about risks like what if the models just don't perform quite the way they are expected to. And particularly if you're building, a software solution that is leveraging generative AI from one of the foundational models and you're then trying to deliver a service where precision is really important and the results that you deliver aren't what the client expected or not what you promised because you've made a marketing claim that is inaccurate, that can lead to real litigation risk. So when we think about coverages like E&O and D&O, there certainly are specific risks for these sorts of companies that they ought to be mindful of.
00:22:35 Sam: Beyond model performance, certainly copyright and intellectual property broadly, that's a theme or a question that the space is navigating. But again, I think that's an area where having the right insurance coverage and having the right risk management advice can be really valuable.
00:22:50 Angela: What, as you think about the future of Vouch and what you wanna achieve, what would you say is one of the things that keeps you up at night?
00:22:57 Sam: Well, I guess what I'd say is there's nothing right now that acutely keeps me up at night, there's not like one persistent issue that causes me a lot of consternation. I think the journey of building a company, particularly building a mid-stage company is at any point in time, you're going to have one or two small to midsize crises going on. And that's just the name of the game because you're trying to do a lot with a little and you're trying to do it very quickly.
00:23:17 Sam: And so, good news is most nights I sleep well. Bad news is some nights I don't because there's something that's looming over us that the next day I've got to get up and go and resolve. I will say though, this is something I think you get better at with some reps. And then the other piece honestly is just trying to do too much with too little time. And so the combination of work and family and trying to stay sane on the personal front, that balance is probably what eats into my sleep schedule more than anything else.
00:23:40 Angela: That's funny. Yeah, no, it's interesting. I think at some point, I don't remember what it was, but probably a few years into Climb, I realized I'm always gonna have something that I'm worried about. There's always gonna be a crisis. And it's almost like the definition of the CEO's job. If stuff's too quiet for too long, then you're just like, now I'm just not hearing what they are.
00:24:01 Sam: I completely agree with that definition. And the problems flow upward as they should. If the stuff that's coming across my desk is stuff I can easily swat away, honestly means I probably don't have the right leadership team in place. So when I'm only seeing the bigger problems, I actually take that as a good sign that I've got a great team because it means they're just resolving anything else.
00:24:19 Sam: And as your company gets bigger and more complex, the problems only get bigger. And so your ability to manage yourself, deal with those problems, prioritize them appropriately, cut through it, cut through all the noise and keep your team focused. I really think that is the job.
00:24:34 Angela: Yeah, it's interesting because I remember every time you raise money or every time you hit that new inflection point, you get that moment to get excited, celebrate, whatever. But the reality is that typically those things just mean now the stakes have been raised, right?
00:24:47 Sam: Yes.
00:24:47 Angela: And now you got more money. So that means, the bar is higher, right?
00:24:52 Sam: The bar is higher.
00:24:52 Angela: You gotta deploy it. Probably it means more people. It means more products, more customers, and that's more stuff to manage and it’s sort of a paradox.
00:25:00 Sam: Well, and the magnitude of mistakes goes up. When you’re a small company and you have operational issue or you have a financial control that doesn't work the way it should, well, at the end of the day, maybe you have a $10,000 problem. When you're a more mature company, that's a million dollar problem. And so just making sure you're upgrading your systems along the way so that you don't have things that really blow you up. That's important too.
00:25:19 Angela: One thing I think that's also interesting is how you manage your team too, because sometimes, the people who really thrive and perform in those early scrappy, everyone around the table, just figure out, throw things at the wall, aren't the people who thrive in the more systematized and more structured organization that if you're hitting the milestones you wanna hit and doing what you set out to do, is where you wanna go.
00:25:47 Sam: Completely agree with that framing. And I think it's a really good lesson there as a leader. And certainly I've made mistakes where you take someone who is amazing as an early company person, and then you give them a lot more responsibility and say, as opposed to your job being, go out there and just figure it out and shoot up the situation. Instead, you have to run this really, routinized, controlled part of the business with tons of people working for you and lots of operational controls in place. And a lot of people will try to do it, but their instincts and skill sets just are wrong.
00:26:16 Angela: And they don't like it.
00:26:17 Sam: They don't like it, they hate it. It's not good for them, it's not good for the business, it's not good for you, everyone is unhappy. And so just a little bit of reality check on that, that you need different skills and personalities and mindsets for different roles and at different stages. I think that there's a really good lesson there.
00:26:30 Angela: I remember I had worked in really big companies. I had worked at American Express and Citi, and then I started Orchard. And I remember the first time someone came to me at Orchard, we probably had 10 employees, maybe 12 and I think they asked when they might get a promotion, I don't think it was a performance review. I think someone came and was like, “When can I discuss being promoted?”
00:26:52 Angela: And I was like, “Promoted, what?” You do have a job title? And it's completely reasonable that you're curious when you might make more money or be in a higher job title. And then I thought back and I was like, I guess that's why we had those performance management systems at AmEx and Citi. But when I was working there, I didn't think about it. I didn’t think about the fact that someone had created those and why they just existed.
00:27:21 Sam: It's a fish in water, right? You have these incentives that are external to you and you just start navigating them.
00:27:27 Angela: Yes.
00:27:27 Sam: And what I think a lot of people, when they make the transition, particularly from a very big company into a small company for the first time, that's a real shock for a lot of folks because a lot of that stuff just isn't gonna be in place. Or even if it is in place, it simply may not be as important. And so shifting the attention to what really matters in the context of a younger company or a growth company, that's a far bridge for some folks.
00:27:50 Angela: It really is. It really is. And it can be, like in my unique situation where I was actually one of the people in charge. It can also be a little disorienting because then you all sudden are wondering like, should we be thinking about how we promote people? Or is that a distraction right now? Right? And knowing when to bring those things in, how much energy to put towards them and navigating that balance. That was really challenging for me in my first go around. I think I've got more of a grasp on it now.
00:28:23 Sam: Particularly as a first time founder, I think the general mental model, certainly my mental model first time around was, why are people asking me for this? Like, this doesn't matter. I think one has to take a step back and realize, this is a natural human desire to understand where they are in the pecking order and understand what advancement looks like for a lack of better term. How do I get more seniority? How do I get more comp? How do I get more responsibility? How do I develop?
00:28:45 Sam: And so, second time around, we actually at Vouch did put a lot of thought into, well, what's our leveling framework? What's our competency matrix? How does that tie to titling and compensation? And I think the good news is we mostly got it right. We didn't spend a huge amount of time trying to perfect every last detail because we also knew it was something we could go back and evolve and reinvent. And we've gone through, now multiple iterations of that. Frankly, credit to the person who leads our people team on that front.
00:29:11 Angela: I think that I had the same instinct of, we don't need that stuff, why are you worried about it? The people who work here should just be okay working here and just do your work and you'll get comp and just trust us isn't the right one because at the end of the day, what happens is, I think there can be a lot of confusion and talking that happens and comparing and whatever. But if you just create that framework and you just do it, you alleviate some of the gossip.
00:29:36 Sam: Oh, completely. You're removing anxiety and uncertainty, which again, going back to the role of leader in a higher-up business. I think making things very clear for your people as much as you possibly can, particularly since there are certain areas that are just going to be ambiguous and uncertain, I think is really useful.
00:29:51 Angela: Feedback or like kind of advice I always give to people who are really early on in their career, potentially just, like looking for their first job or the first year in, is if you're somebody who craves structure or someone who craves validation, right? Which I know I often am. You may not wanna go to a startup, like a really early stage startup because the likelihood is you're not gonna get a lot of that stuff.
00:30:21 Angela: And so you go there and hope it's a startup that invests in that stuff or hope it's a startup that if you ask for it, they'll make it for you. But the other option is you go work at a place like an AmEx or a Citi or a growth stage company and it'll be more likely to exist.
00:30:41 Sam: Yeah, totally agree with that. And I give similar advice when I talk to folks who are early in their career or thinking about making a transition. I also think there's a really big difference between a very young company that like zero to 30 person company versus more of the early growth company, the 50 to 250 versus the mature private company, the 300 to 1000 person, which is again, very different from the 5000 to 20,000 person, very large company, let alone the mega companies. And so I do think understanding what spectrum of businesses and scale of organization you're going to thrive in, is a really important thing for people to be aware of.
00:31:19 Angela: And to know, as your career starts to develop, you also know what matters to you. And so even within one of those ranges, there's things that you can pick up on during the interview process or what are the questions that you can ask a company about that kind of stuff? Like, how do you manage performance? If their answer... even if they're a 250 person company, if they're like, we don't really do that, it's like, all right.
00:31:41 Sam: Be clear about what your values are and how they're expressed. And you're going to save folks a lot of time.
00:31:45 Angela: Okay. All right. I'm going to ask you four speed round questions.
00:31:49 Sam: Deal.
00:31:50 Angela: What's a book you're reading or podcast that you're enjoying?
00:31:54 Sam: I’m rereading Neal Stephenson, The Diamond Age, which was written in the mid ‘90s. And it talks about the impact of both nanotechnology and AI. It's a really fun kind of dystopian future. I read it maybe 15 years ago and picked it up again. Also reading Ed Yong's An Immense World, which is focused on animal senses. And for science nerds or folks who just like thinking about human perception, it's a really good reminder around how limited we are in terms of how we appreciate the world and kind of seeing it through the lens of how other animals see and understand the world is useful.
00:32:26 Sam: On the podcast front, I'm a huge fan of the Acquired Podcast. Ben and David, I think, are just great craftsmen at what they do and telling the company stories. Vouch has been a proud sponsor there on and off over a number of years. I really love that work. I'm also a history nerd. And so I've been really enjoying the Empire Podcast, which is by William Dalrymple and Anita Anand. And I would highly recommend that. They started by talking about the East India Trading Company and have gone on to talk about a bunch of other empires and political systems over the years.
00:32:56 Angela: Oh, interesting. My daughter, who's in seventh grade, is learning about the East India Trading Company right now.
00:33:01 Sam: Very cool.
00:33:02 Angela: Yeah. And they learn about a lot of stuff that was not how it was taught back when we were kids.
00:33:07 Sam: Yes. History has many aspects to it, which are uncomfortable, to say the least.
00:33:12 Angela: Yes, exactly. And they teach the kids, which I think is great. All right. If you could live anywhere in the world for one year, where would it be?
00:33:19 Sam: I’m a city guy, I guess, by experience. You know, over the last 20 years, I've lived in New York, London, Beijing, and now San Francisco. I got to say, if I were to go live somewhere for an extended period, probably it would be South Island in New Zealand. It's just an incredibly beautiful place. I had a chance to travel there with my wife and a couple of our very close friends a number of years ago. And I think it would just be a really nice change away from how I've been living for a long time now.
00:33:41 Angela: Yeah. Oh, sounds nice. I'd like to go there. Favorite productivity hack?
00:33:47 Sam: So for me, it's about getting into a flow state, particularly when I'm doing deeper work or writing. And again, I will admit that I'm a bit nerdy in this. For me, listening to classical music is actually hugely useful. I particularly like, late 19th century classical Chopin, Mahler, Pavel. Late romantic period classical. It kind of gets me into a headspace where I can think deeply and also produce a lot of work in a way where frankly, if I'm sitting in the office, without headphones on, I can get distracted pretty easily.
00:34:18 Angela: No, that makes sense. I've listened to some of the Spotify, classical music for focus playlist they have. And I agree that it does an amazing job of blocking out.
00:34:31 Sam: Totally switches something in my brain.
00:34:32 Angela: Yeah. Where can listeners find you?
00:34:36 Sam: So best way to find Vouch is at vouch.us. And of course, if you have insurance needs or risk management needs, we'd love to talk to you. For me, personally, I'm reasonably active on Twitter. HodgesSam is my handle. And then also on LinkedIn, even though I'll admit I have many things I don't like about the LinkedIn product, I do find it to be really useful and we do a lot of posting there.
00:34:59 Angela: All right. Well, thank you so much. This was great. It was great to catch up with you.
00:35:03 Sam: Likewise, yeah, this was fun.
00:35:04 Angela: Yeah, thanks a lot.
00:35:07 Scott Hartley: 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.