Host: Kristofor Lawson
Mixing and Editing: James Parkinson
Theme Music: Nic Buchanan
Artwork: Andrew Millist
KRIS: From Lawson Media - This is Building A Unicorn, the show exploring what it takes to build a big, global business. I’m Kristofor Lawson.
KRIS: We’re now a couple of years into our journey at Lawson Media, and one of the issues that comes up when you’re trying to build any business is culture. How do you develop a culture that inspires your staff to fulfill the mission of the company?
KRIS: Now I’ve worked in plenty of places where culture wasn’t a big focus and those organisations had a real issue with staff being motivated to do their best work. I’d be talking to people who were constantly complaining about the way the business was run and it didn’t really foster creativity. So how do you build a great company culture? And how do you keep tabs on your culture when growing your company?
KRIS: Didier Elzinga is the CEO and Founder of Culture Amp - a platform that allows companies around the world to measure their culture and use that data to improve the experience for their staff.
Didier Elzinga: So Culture Amp is a people and culture platform. And what does that mean? It helps organisations collect data everywhere in the employee lifecycle. So how do people feel as they're joining the company? How do people feel as they're leaving the company? How do people feel while they're at the company? How do they collect feedback from each other? So how do you feel about your manager? What sort of performance feedback is your manager giving you? How’s the team going? All those sorts of places? So how do we collect our everywhere? How do we understand that data? So we pull it all together, we analyse it, we provide benchmarks, we do all these things to help companies understand what that data is telling them. And then most importantly, how do we act on that? So what do we do with that data? So Culture Amp is a people and culture platform to help people collect, understand and act on employee feedback?
KRIS: Didier’s journey to become the CEO of Culture Amp - a global company which recently was valued at more than a billion dollars, really started in the Adelaide Hills.
Didier Elzinga: So I was born in Canberra. My dad was doing a PhD in ANU. With a name like Didier, I often get asked, so are you French? And the answer is no. I have a Dutch father and an Australian mother and they couldn't agree. So they chose French. But I grew up, we ended up my parents ended up in Adelaide and interestingly, ended up in Adelaide because my mom's an artist, and this was the Don Dunston years where, if you are an artist in Australia, South Australia was the place to be. And so they moved there. And I think I was four or something. So I grew up in Adelaide… specifically in the Adelaide Hills.
KRIS: What were you like as a kid growing up? What were you into? What? What sort of fascinated you?
Didier Elzinga: Oh wow, lots of things… My brother Ramon and I… So it was really interesting because it was just my parents, Ramon and I. So we had family in Victoria, we had family in Europe, but no one in the same state. It was just us. Played a lot of sport. You know, most of the time at home was my brother and I tried to beat each other at basketball, at cricket at, you know, any sport we could come up with. My parents actually met in Japan. And so I was very interested in Japanese things. I grew up reading all of that Tibetan Buddhism. I loved, you know, fantasy. My mom’s, as an artist, was a silk painter, or is a textile artist, which is a silk painter. She painted a lot of imaginary fantastic creations. And so you know, as a kid, I played a lot of sport but I was also a nerd. And I was a dreamer. Somebody you know, I played Dungeons and Dragons, I you know, got into Flights of Fantasy and all that stuff and I read a tonne and I still do.
KRIS: Didier grew up largely as the internet was being developed. It was a time when there was nothing but opportunity for people interested in tech, and throughout his schooling years he became more and more interested in the possibilities.
Didier Elzinga: My dad was the one that exposed me to that because he, you know, he was using computers in his own work and looking at data and different things. And I enjoyed playing around with them. We used to follow this pattern where we would get a computer game, and then I would get pretty quickly get the high school because I learned really fast and then about a week later, my brother Ramon would beat my high score consistently because he was just more... He was more dedicated than I was. At which point I would essentially hack the game and change his name to be not my name on the scoreboard, and then we both get annoyed and stop playing the game anymore. This kind of pattern would repeat. And so I was kind of fascinated by computers and hacking around with them and teaching myself to programme. And so while I was in high school, I did quite a bit of stuff at the school, I went to Heathwood High, which is a public school, and yet, we had quite a good little computer lab and I would spend quite a bit of time in there writing things. I had the fortune in year 10 or 11, I think it was, to go to a place called the Technology School of the Future, which was set up in South Australia, it was funded to have a whole bunch of the latest material. I can't remember how I got there, but it was like a week. And I spent a week there and I fell in love with all this stuff. And one of the things I fell in love with was a piece of software called Adobe Photoshop 1.0. And so I was playing with that and I actually used that in your 12 to do my visual art major. My work for my year 12 art was digital manipulated photography using Photoshop 1.0.
KRIS: As Didier finished school and moved on to college, he made the decision to study computer science at The University of Adelaide.
Didier Elzinga: And one of the reasons I chose computer science, was that computer science was the only course that got its own mandatory email account. If you weren’t doing computer science, you had to pay about $20 a year to get one through the uni. And so I picked computer science. And so I remember Mosaic the browser, being the one that was just come on to the world when I was doing first year computer science.
KRIS: Wow. What was your first computer that you owned?
Didier Elzinga: Me personally, actually don't know. But my dad was a psychologist. He was an apple guy. And so we had a fat Mac, if you remember the fat Mac, which was the one after the not the very original, there was the 128 and then the 512. And then we had a series of Macs. So I had an SE30, had IIFX, and then, we're jumping around a bit, but post finishing my degree I started working at Rising Sun in film, and so the first computer, that I was the only person that used, was a Silicon Graphics box that cost more than my house. I didn't pay for it though.
KRIS: Truthfully, Didier wanted to do visual art, but after seeing his mother struggle to make it as an artist, he decided computer science would allow him a good mix of being involved in technology, but also holding on to his artistic dreams. So when he graduated he joined a small visual effects startup called Rising Sun Pictures.
Didier Elzinga: I think they had five people when I joined.
KRIS: Right. What, what, what was your job there and what attracted you to working at a startup?
Didier Elzinga: They were doing cool stuff with computer graphics. That's all I needed to know. While I was at uni, I worked on campus on the Apple Store. So Apple had a store on campus and I worked in that. The very first job I had was actually colour pre-press. So while I was doing my year 12 prac, I working the place called corporate colour, or sorry, I used a place like Corporate Colour, and they gave me work experience. And then they offered me a job. And I remember going home and saying to Mom and Dad, what do you think I should do? Should I go to uni? Or should I take this job? They were offering me the princely sum of $12,000 a year, which seemed like a lot of money at the time. And I remember dad saying to me, “Look, you do what you want to do, we’ll back you either way, but I think you should go to uni because it's a social experience that you can never have again”. There was a second thing he said, which I can't remember. But the third thing he said, which I definitely remember is “you go to uni to learn to think, and they won't teach you that on the job”. And so I actually went back to them and said, “Look, I'm really flattered. Thank you. How about I work for you until I go to uni”. And so I worked a couple of months in colour pre-press, which was fantastic. And they, they taught me a lot. And it probably set me up for some of the stuff that I did later. And then I went to uni, and while I was as uni I worked at the Apple campus. And I met Tony Clark from Rising Sun Pictures whilst working for for the Apple Store. And I just ran across him and saw that he was doing this computer graphics stuff. I'm like, this is amazing. Can I come out, check out what you're doing? And he said, Sure. So I came out and I did a tour with a friend of mine. And we saw the whole place and had all these SGIs and I was really excited because I knew what they were. And got to the top and I saw he had a little Silicon Graphics Indy, and there was a jazz drive attached, which is an old optical…
KRIS: I remember those.
Didier Elzinga: Storage thing. Yeah. And I said to Tony, are you having trouble with the jazz drive? And he's like, yeah, the damn thing we can't get it to work. And I said, well which version of Irix are you running on the Indy and he's like, “ohh 5.3, but we're just about to upgrade to 6.1”. I said, well, it's not gonna work on 6.1 either, you have to get it to 6.2 because the jazz drive won't work. And he said, oh okay, that's great. We walked out and my friend Brett said to me “what was that?, like, how did you know that?” And the truth is, and this is kind of like my, my, my dirty secret, if you will. That's all I knew about Silicon Graphics, like the sum total of my knowledge around Silicon Graphics computers was that a jazz drive wouldn't work on a pre 6.1. I'd read it in a newsgroup the day before. And so my one secret to success is that I know one little thing about quite a few things. And so then if I can pitch that the right way, people will assume I know everything else. And then I just have to run like hell to catch up. And so what happened in this situation is, Tony basically reached out to me and asked me if I wanted work experience. And then I did work experience and I was just sort of how hanging around. And then Gail, who's one of the owners, a couple of days later saw me and said, you know, do you work here? And I said, No, but I'd like to. And they offered me a job as a sysadmin. So I started life as a sysadmin. Working for Rising Sun.
KRIS: Being a startup, Didier was involved in a lot of different projects, and quickly impressed the founders. He had proved himself in the early days, and the founders rewarded him with a lot of trust and responsibility.
Didier Elzinga: Yeah. So I was working in sysadmin and as a software engineer. I mean, when you're a six or seven person, company, everybody's everything. Yeah. My very first thing that I did was building a tool for Softimage to control a motion control rig. So Rising Sun had its own little hothead that they were controlling. And so we're writing software so that it would control it and most of the trick was not controlling it, because that was fairly easy, but making sure that you weren't going to destroy the rig. In the computer, you can make it do all these things. But if you try and make it do that in the real world, you know, the head flies off. So I learned a lot about cameras. A lot about things like that. And started writing software in the Colour Management space, which ended up becoming a another spin out company that we still have to do this day called Cospective, which was Rising Sun Research. And started getting into compositing, which is the image processing moving images, basically Adobe Photoshop with moving images. And the Rising Sun was started by four people. So there was Tony, Wayne, and Gail, and Steve Roberts. And Steve Roberts was the compositor. So Wayne was animating, Gail, basically ran everything, and Tony was the cinematographer. And together they did everything. A few years in Steve Roberts decided to step out. And so it created a void because there was nobody doing what he was doing. And Tony, Wayne, and Gail basically came to me and said, Look, do you want to do the compositing part, because I was already doing a lot of image processing anyway. And so I put my hand up and said, yep, that sounds good. Let me do that. And yeah became a compositor, then a supervisor, and ended up as the general manager, and ultimately the CEO.
KRIS: And the company was working on some really, really big budget productions as well while you were there.
Didier Elzinga: Oh, absolutely. I mean, I was there for 13 years. So, Rising Sun was a was and is, you know in a massive component of who I am and what I've got to. It's probably two halves. So the first four or five years of that was we were a post production company. We did CD ROMs, we did websites, we did TV commercials, we did a little bit of film. What we found was that we were to daggy for advertising. Like, you know, a lot of that world is people come in and they want to pay 1000 bucks an hour for a flame and they want a couch that befits paying 1000 bucks an hour for a flame. We will much more in the film mould, which is when the director walks in, they're like, here's a milk crate to sit on. They're like good because I want all the money on the screen. And that suited us well. So we kind of gravitated towards that anyway. And we had the opportunity to, to do some work on some good films and we built that into something else. And yeah over the 13 years, we became almost a pure Hollywood visual effects company. And we worked on Harry Potter, Lord of the Rings, Batman, Superman, and since I left, they've continued to do amazing work on you know, X-Men, Gravity, Game of Thrones, all sorts of incredible projects.
KRIS: As the company started to evolve, was there a point where were you personally was like, like, this is it for me like this is this is so interesting. I'm so fascinated with what's going on. Like, this is the place I want to work for a long period of time. Like was there a moment like that for you?
Didier Elzinga: Yes, I think not so much because I suddenly went cool. Now this is really interesting. This is where I want to be forever. I think I'm a relatively loyal person anyway. So that was always been a big part of it. And Wayne, Tony and Gail gave me a lot of opportunity, and they trusted me, probably more than then you should reasonably expect someone to trust, a you know, 19, 20, 22, 24. I was made CEO when I was 26. And that was hugely important to me that I was being given all these opportunities. So it wasn't just the work. It was also that I was given autonomy and the ability to try and make them happen. And we were making this up as we went along. We were like, We loved film, but was there a business in it? Could we afford to not do commercials?
Didier Elzinga: Film is a brutal industry and a really, really difficult one to be successful over the long term. And I reflect on it, I now have you know, many of the companies that I used to work with on the other side as customers. And I talk to them too. So you know, your Animal Logic’s, and your Moving Picture Company’s, and your Pixar’s and so on. And I talked to them about the industry. And when I look back since I left Rising Sun, which is, you know, nine years ago, half the people I used to compete with, they're all gone. Those companies are just not in business anymore. So, you know, it's a testament to the, to the founders of RSP, that they're still around and doing amazing work. It was a really, really difficult business. But yeah, for for for 10 of those 13 years, the thought of going anywhere else or doing anything else, it just never crossed my mind.
KRIS: Didier became the General Manager and then CEO of Rising Sun Pictures by the time he was just 26. At the time the company had around 35 people and was still struggling in the aftermath of September 11.
Didier Elzinga: There was a pivotal project for us, there was pivotal moments, there were moments where we almost died. 9/11, as a global event was obviously catastrophic. It was also catastrophic in the film industry, because what happened is, film is a confidence game. And so in the in the days, and the weeks, and the months after the event, and interestingly, or kind of strangely enough, I remember, I went into the office early on the morning where that was all happening. And nobody else was in the office. And I went in because I was trying to finish off a shot that I had to work on. And so I was sitting there setting something up at like five or six in the morning. And I hit render. And then while I was waiting for the thing to render, I was reading the news groups, and I was watching this flame war, erupt in the new group, and I couldn't figure out what was going on. And people were hurling abuse at each other. And then I kind of figured, something’s happened. What am I going to do? And I went to turn the TV on and actually watch the second plane, hit you know, it just happened sort of thing. And so I saw that happen. I was like, oh, wow, you know what's going on. And then, the month later, what happened was no films got greenlit because nobody knew what the future was going to be. Everyone was worried. And then, you know, eventually things got back on ever-footing, and stuff started happening and so on. But that was like an air bubble that ran through the film industry. And because we were at the back end of it a year and a bit later, there was no work, there was nothing, there was no visual effects to be done. And so we were in this awful situation where we suddenly you know, a few things fell over. And one of the first things I had to do when I was was I was actually GM at the time, then, you know, essentially being tasked with running the company was get up in front of the 30 odd people we have and say, I don't know how we're going to make payroll next week, because the projects we had have all fallen over and there's just nothing in the pipeline. And that was, that was, really hard. Thankfully, about four days later, we landed work on Lord Of The Rings. And that was a, you know, a rescue job, we had to get not a rescue job but and we had to come in and help them get the film finished. And so we went from having nothing to you know, doing them some of the best work of our lives, you know, in the space of week. And so that whole thing was was tricky, but we were about 30 people. And then off the back of that we worked on a project called Charlotte's Web. That really helped make Rising Sun in the sense that we grew from 30 to 150 in about it in about a year. And I didn't know it at the time, but now I look back and realise that it was really formative for me because over the next two years, we were growing like crazy. And I remember thinking at the time when we’d, you know, quintupled in size. People tell me this growth thing is really hard. I've got it nailed. I am so good. This is so awesome. We're doing everything right. What you realise, of course, is that growth and more money coming in, pastes over all the problems and once the music stops, you realise all the mistakes you made, all the things you didn't do right, all the things you didn't invest in. And a lot of those are around people. And so I learned a lot through that process that helped probably inform what I now do.
KRIS: Yeah. I mean, that's, that's insane growth. And how do you how did you deal with that, like, as a young, young leader in the company, then having to figure out, we just we need more people? How do you deal with that, from like, a culture perspective, etc? And how do you actually had to actually handle rapid scale?
Didier Elzinga: I mean, I think the first thing is, it's never just one person. So it's not just me, it's, you know, it's the founders Tony, its Wayne, and it's Gail. It's the other leaders. You know, I was lucky to have amazing people… you know, James and Jon, and there are a lot of really interesting people there that were also asking the same question like how do we solve this problem? One of the things that's great in the film industry, though, is you know, there's that whole line in show business, “the show must go on”. And so there's just this from top to bottom doesn't matter whether you're a runner, a compositor, or a director, there's this just this insane drive to get the show to the screen. And that kind of forces you through all these things. And that's what we were, you know, the film needs to get made, somehow we have to make it happen. It's not always pretty, it's hard. I mean, I worked harder in film than I've ever worked before or after. And I sometimes look back and you know, we spent a lot of time at Culture Amp, working with customers and internally talking about what does it mean to build sustainable success? What does it mean to deal with well being and mental health in the workplace and all these sorts of things. And then I sit back and think, I'm probably drawing from two of the most dysfunctional industries in the world, which is Hollywood and Silicon Valley, both of which are not set up to be healthy. So I learned both good things, you know, and bad things in that process. The one thing I would take away from that is I learnt how to hire people. And I learnt how to, and this is something that I talk about now today, which is I think that one of the most important skills that any senior leader can have in any part of the business is to convince people much better than you have any right to have, to come and join your company. And if I look back on my time, at RSP, that would be one of the things I was proud of is that I and others, it's never one person's job. We were able to go get amazing people around the world to come to Adelaide and work with us to bring our dreams to reality.
KRIS: Well, I'm did I'm asking this on on a personal level, just because like I studied animation for film and television, when I was at university before I moved into journalism and one of the things I found is that it completely ruined movies for me. Did did sort of working on the on the visual effects aspect of movies did that ruin cinema for you? Can you go and enjoy a film? Or does your mind sort of, you know, think about the the programming code and squares and meshes are behind everything?
Didier Elzinga: It ruins movies for the people that go with you. I love them. But now I've ruined it for the person next to me because I'm talking about this shot and complaining about that and going that shot was obviously you know, done at the last minute and why was that? And all those sorts of things. It changes the way you appreciate film, I think, I think at its best. The great thing is you get to see it from the inside and you get to be around incredibly talented people like I remember, this was earlier even you know when I was younger like 22 or 23. We were pitching a particular film and this director came in and he had this whole thing built around Hawaiian mythology. And I'm a bit of a mythology nut. And so I know quite a lot about Celtic mythology, I knew nothing about Hawaiian mythology. But they're very similar. In many ways, you can kind of do almost a one to one mapping between a lot of the different main players. And so I had this like hour and a half conversation with this director of this film about comparative mythology. And I sort of walked out and I said to one of my friends, like, pinch me, like, this is so cool. I'm getting paid to have conversations about comparative mythology. And so you take that when you go watch the films too, because you're like you, you know what they're thinking about why they're trying to do the things they're doing. But the enduring image for me from having worked in film is a few years ago, we did our Christmas party here for Culture Amp and it was the you know, the latest of Star Wars that come out. And so we're like, we'll go watch it. So we hide out to small cinemas, and everybody came and we watched it and as a lot of Star Wars, not so there's a lot of fun. And then at the end, the credits roll, the lights turn on and everybody files out and I sat there, and I was the only person in the cinema. And I watched all the credits. And then I went back to the Christmas party. And I was saying to people that it was actually a really humbling experience to remind yourself that, you know, visual effects is interesting because credits in a film are done in historical order of when that part was brought into the film vernacular, which is why hairdressers are earlier usually than visual effects, because visual effects came late. And so when you're in visual effects, you have to wait till the end to see your name, which means you realise that you should wait and sit and watch everybody else's. And that, for me is the enduring thing that I took away from film, which is just that honouring of all the work, all the effort, and all the energy. So it ruins some parts of film for me, but I think it gave me more.
KRIS: What's the biggest misconception that people have about Hollywood and the film industry?
Didier Elzinga: I think it's in, in all these things. And I don't think this is, is specific to Hollywood. I think it's true for the music industry. I think it's true for Hollywood. It's true for Silicon Valley. It's probably true. It's true for investment banking, true for restaurants. It's never as glamorous as it looks. You know, in particular in these things, there's a, there's a, there's a desire for the industry to portray itself in a certain way, and we willingly allow that portrayal to happen. But of course, once you're in there, and you realise how it all happens, you realise it doesn't really work that way.
KRIS: After a few years in the CEO chair. Didier started to get an itch… an itch to do something bigger. And part of that was driven by a chance meeting he had with two young founders working on a startup called Atlassian.
Didier Elzinga: There's a couple of things that led into it. So in three years before I left, I went through Entrepreneur of the Year, which is the EY programme with Rising Sun and it was actually, you know, to my To this day, that's one thing, one really pivotal moment in my life. And I owe Tony, Wayne and Gail, a huge debt of gratitude to this, which was they basically said, if you're an entrepreneur and you're doing something, you know, they reached out to people and said, we think you might be a contender to win in this category, and they reached out to Rising Sun. And so we put in a nomination and they said, We love your thing. I mean, you're doing Hollywood from Adelaide, who doesn't love that story. We were, you know, $20 million a year revenue business, 200 employees. They said, this is great, but they said look, one change we would suggest you make to the nomination form is that this is really Entrepreneur of the Year. So ideally, you put one person up, maybe two, or three, but you’re never gonna win with four, just being honest. And when we looked at the backgrounds and stuff, the three of you founded the company, you've got Didier on the nomination, he probably shouldn't be there, you know, ideally one of you three, at best, all three of you. And Wayne, Tony, and Gail, just said nope, we're doing it together. And even though I didn't found the company, I had a small equity stake, but not not similar to what they had. They said it's either all four of us, or it’s none of us. And so we went forward on that basis, we did win our category. We went to the nationals. And ias part of the process for the Nationals, I met two young guys by the name of Mike Cannon-Brooks and Scott Farquhar. And they were building this little business called Atlassian. We became good friends. And over the next three years, I'm watching them build a monotonic revenue curve business. And I'm building a service business for Hollywood. And there's a line from Warren Buffett that kind of was kicking around in My head for three years, which is “when a management team with a reputation for results, meets an industry with a reputation for poor economics, it's the industry that survives with its reputation intact”. And I watched Mike and Scott build this business. And you know, when we met, we were rough, Atlassian was roughly the same size. I don't think even, I had huge amount of respect for them at the time, and I was watching them succeed. But even I had no idea how amazing a business they were building and you look at what they've done now. It's just phenomenal. And I still count them both as really good friends. But it was that was what led me to leave is that over three years, I kept coming back to this idea of I love working for Hollywood. I love telling stories. But I want to make more of a difference in the world. This business model is broken and I can't see how to fix it. And it was that combination with this thinking of I'm still young and I can afford to fail and it really came down to do I want to take a bigger swing? Do I want to push myself and try for something bigger? And ultimately I decided, yes. I decided that I needed to try and make something happen that was bigger than that. And so I made the decision to leave. And that was not an easy decision. I actually tried to leave Rising Sun twice. They talked me out of it successfully twice. But ultimately, I was like, you know, I've given everything I can to this, and I can't figure out how I can I can do more. It was probably egotistical to be honest, in leaving, but it was ultimately the right thing for me. And it gave me the opportunity to go and pursue a bigger and different dream.
KRIS: How so? How egotistical? How do you mean?
Didier Elzinga: So one of the things that I say to people is that even at RSP, and there was two businesses, there's Rising Sun Pictures, and there was Rising Sun Research which I co-founded with the owners of RSP and we built colour management software that we ended up selling to THX and then we built a synchronised quicktime player that won a technical Academy achievement award? You know, Chris Nolan uses all his films. And that company is now called Cospective. And they're doing really well. In both situations, people are like how did you do this from Adelaid? I was like too naive to know that I couldn't, you know, you just said turn up and try. And what drives you is a combination of sort of fear and pride. And so the egotism is, you know, I was late 20s running this amazing company from Adelaide and thinking I can do better than this. You know, I should be able to make more of a difference in the world. That's part of the egotism. And then just… it's a naivety I think, more than anything, I actually think that's an important part of being an entrepreneur.
KRIS: Didier knew that his next step would be to start a software company…. But he wasn’t quite sure what that company would even be… And coming up after the break, Didier makes his move into the world of tech with a crazy business plan.
KRIS: This is Building A Unicorn - I’m Kristofor Lawson.
KRIS: Rising Sun Pictures was doing amazing work in the film industry yet Didier still felt the call to give up his great job and start building something new. But the truth was he didn’t quite know what he wanted to build. However he did have a crazy, audacious goal for his new business.
Didier Elzinga: And I wrote down the world's most naive business plan 10,000 by 10,000 equals 100 million. If I can build a company that has tens of thousands of customers spending tens of thousands of dollars a year, I'll have hundreds of millions of dollars in revenue. There you go, let's go do it. I didn't know what type of software company yet. And that was I spent some time thinking about and I just kept coming back to the fact that people and culture was the thing I cared about the most. And if I looked at my time at RSP, we were early in what is now known as agile development. So I was a bit of a nerd on all of that sort of stuff as well. So what I would call Eastern Lean, the precursors to what we currently call agile in terms of extreme programming, and scrum and crystal method and all these different things, but at its core, what it was was the application of new ways of thinking about engaging people in the world of work. And we were applying those to film. How do you bring together animators and creative directors and programmers and all these people to do stuff that you shouldn't be able to do with less resources than you really need to get it done. And so when I look back on it, I thought the thing that that motivates me the most, the thing that I enjoy the most is figuring out how to help people be successful. So why don't I build software that tries to do that, too.
KRIS: Around this time, Didier and his wife were expecting their second child, and they wanted to challenge themselves. Whilst he loved working in Adelaide and had been successful at Rising Sun Pictures, he knew he wanted to build something on a much larger scale.
Didier Elzinga: So there's no problem with being able to get great people. It's harder to get 100 and it's just it's the nature of a smaller city like you know, you have to you have to get people to have kids or want certain things, and then you go to target them and you can get them. And I was thinking big and I'm like if I'm going to do something bigger than what I've done before, I need the opportunity to play on a bigger playing field. And, you know, I talked I was lucky to meet a bunch of other successful people. And one of the things I observed in all of them was just this willingness to keep testing yourself. Like if you succeeded on this playing field and go to that playing field. And when you're playing at the right level, there is an infinite number of playing fields that you need to measure yourself on. So I was kind of naively, egotistically wanting to push myself. And we talked about moving overseas, but having kids we like, we actually like Australia, it's a great place to live. It's a good balance in work life, so we want to stay here. So then it was really about to go to Melbourne or Sydney. good reasons to go to both. We ended up coming to Melbourne because we found a school that we could get the kids into. Then we had some friends here. It was a fairly quick thing. My wife is an opera singer, and there's some music stuff here. We made the decision and to go, the time from when we decided we should start looking to when we moved to Melbourne was 11 weeks. So we kind of said, All right, well, let's do it. And then next thing we knew we were living in Melbourne.
KRIS: Moving is hard at the best of times, let alone when you’re trying to build a new startup. Didier was still going through the process of working out what he wanted his company to even be. It’s an iterative process that every startup founder needs to embrace if they want to be successful. He knew he wanted to solve a problem around culture, but he was still working out some of the details.
Didier Elzinga: So I was working on what I called performance development, continuous performance development. So why is it that we have this universally loathed, annual, backwards looking process, when what we actually want is a forward looking continuous coaching conversation. And at the time, I had a Twitter feed or a Twitter search, which was “Success Factor sucks”. No disrespect to the people at SAP who I know quite well. But now, Success Factor’s done an incredible job in taking an offline process online, and I was like, Oh, that's really ugly and painful. There's got to be a better way of doing it. And so that was what I was focused on doing. And that's what I was trying to build. What we found is, you know, I moved to Melbourne, I met my co-founders here… And what we realised was that it was a problem. It was a universal problem without a universal solution. And it was we were struggling to get the traction that we thought we should get, and we couldn't work out with Why. And it took us about six months to come to the realisation that wasn't going to work. And so we finally had the discipline to say alright if this is not growing, we need to invest in something else. We're going to pivot, you know, to use the, the common vernacular. And so we actually came up with a second idea, which was around this concept of checklists as a lightweight business process management idea that came out of the Checklist Manifesto. It's a fantastic book by Atul Gawande. We were much more disciplined we killed that idea in six weeks. And then we came to the idea that the business is now based on which is, what if it's the same idea, but rather than trying to solve it at the individual level, you solve it at the organisational level, and that's what we did and what we set out to do. And we had our first customer within four weeks. And you know, as they say, the rest is history. What's interesting is that earlier in the year, we acquired a company called Zugata, that five years afterwards had gone and tried to solve the problem we set out to solve and had done it better. And so now we're full circle.
KRIS: And so you're, you're working on this idea? By yourself? Yes. For a little while. Um, so how did you actually meet your co founders?
Didier Elzinga: So I was in, I was doing a talk in Sydney, on creativity and innovation and all this sort of stuff. Because one of the things that I had the fortune to get good at when I was RSP is talking in front of people, like I was a terrible public speaker school, I hated it, like I would hold the lectern, and my hands would shake. For some reason, while I was at RSP, I made the decision that it would be really valuable and useful to be able to talk in front of groups of people. And so I would just say yes to everything that got put in front of me. And over time, I got better. And so after I left RSP, because of what I've done at RSP, I was still given a lot of opportunities to talk to people about things. And so I was doing something in Sydney and I met Tom Howard from Adioso, and he's he was from Melbourne and he said, Oh, you know, you're in Melbourne, you should come to this dinner. There's a dinner of startup founders where we just, you know, commiserate with each other. So I came along to this dinner and I met Jon and Doug. And we got chatting. And they're like, Where are you working from? And I said, oh from home? And they're like, well, we're working in this tiny little co-working space, which is the original version of i9 in Chrome on, why don't you come and hang out with us. And so I did. And interestingly, it was three levels. The bottom level was just a walk in the second levels where the toilet was. And the third floor was where most people worked. Jon and Doug had two tiny little desks next to the toilet on the second floor. And I don't know why. But I ended up sitting between them on the second floor. And so for the next six months, I was building my business, they were building their own startup, which was a awesome, awesome idea for about 10 people in the world, which they eventually came to the conclusion was true. And so we got to the end of the year. And then went, it was this kind of funny thing where they were about to go back to consulting, because their startup wasn't gonna work. I was struggling mightily to get… can write code, but I'm not. I'm not a world class software engineer. And so we looked at each other. And they're like, we're two software engineers that are looking for a problem to solve. And I'm like, I have a problem to solve that needs two software engineer, software architects, we should join up. And so we had a few conversations, and it seemed like a good idea. And, and then they said, if we're going to do this, there's another person we want to bring in Rod Hamilton. We've always wanted to work with him. So if we do this, we should do this with him too. And it was really hard for me because I was like, I'm going from 100 because one of the things is we're going to do this, we're gonna do this equally. Like you're going to come on board, we're all going to be in it together. And I took a lot from talking to Mike and Scott about the fact that building anything for the long run is a marathon, not a sprint. And so you don't want to over optimise for what somebody's doing today. You want to pick people that you're willing to go to battle for, you know, 10 years plus, and so on. Went in going, if I'm going to do it, I'm going to do it because we're all in it together. And so I was looking at going from 100% of the company to 25% of the company. But what got me over the line was thinking about it going, look, I hadn't met Rod, I spent like an hour with Rod at the time. But I'm like, if I believe in these two people, Jon and Doug, then I have to believe in their belief and other people. I mean, for a penny or in for a pound, let's just do it. And it's the best decision I ever made.
KRIS: This is something that a lot of founders really struggle with. How do we actually split the pie at the start of the company? How do we decide who actually does what, and how, you know a lot of a lot of companies fail because people don't make smart decisions at the very beginning of the company. But It sounds like you're of the view that because you trusted your other founders, you should just trust them implicitly.
Didier Elzinga: I would be the last person to say that there is a right answer to this, it is really, really hard. I guess the way I approached it was I wanted to build a company where we were all in it for the long haul for the same reason. So I needed to have that approach. I mean, my advice to other people would be, there are times where it's appropriate for it to be asymmetric. Depending on the skills and experience that our people are bringing, we had the benefit that we're all roughly the same age, we all had roughly the same experience. And that became a problem too, because as we've, you know, talked about publicly, this is a company that was founded with four white 30, something male, IT, brunettes. So on any diversity factor that you can see, we were a monoculture… But that also meant that it was easier in a way to say, look, we should all be equal, like we're all bringing the same to the table. It wasn't a situation of one founder being a 20 plus year CEO and the other person being straight out of school. It was we're all fairly similar. And so what I would say to most people is like, don't sweat the small stuff in this like don't micro optimise it because it will come back to create resentment later. Definitely do a vesting schedule, you're in it together, you should 25, 25, 25, 25 vest over four years. So if all of you are here in four years time, you're all in it together, someone leaves halfway through, they should only have half the equity. That's fairly simple. But I'm a believer in, make it simple and get on with it and don't don't have reasons for people to get upset.
KRIS: And how are you? How are you funding sort of like the initial, the initial company?
Didier Elzinga: So we were fortunate because we were all in our early 30s. And we'd all been successful at some lie. We've been, you know, reasonably not massively well paid, but reasonably well paid, that we could afford to work without being paid for a period of time. And so, Culture App was bootstrapped to a million in revenue by the founders. So we put a little bit of money And that was our savings. And then we didn't get paid for, you know, a year and a half. And we made up the difference by at one point where we didn't quite couldn't quite make the numbers work. Two of us went back consulting, while the other two kept pushing the business along.
KRIS: After spending a year working on the business on his own, Didier found some co-founders. And it was early 2011 when the team really worked out what their product would be. Finding initial customers is a challenge for any business… but for Culture Amp - they’d already done the legwork of talking to people who may be interested in the product, finding their pain points, and building them a solution.
Didier Elzinga: And from that point, we, we had revenue from four weeks after we had that idea because what we actually do is we said, okay, we've learned a lot now, Jon and I sat down and put together a four page PDF. We had Jason McPherson, Dr. Jason McPherson who's our Chief Scientist, he was our first employee, he was working three days a week for us. We were paying him out of a little bit of money that we had. We created this four page PDF, pitched it to ten CEOs, four said they'd buy it if we built it. So we built it. And four weeks later, we had our first customer and then we ran like hell to grow revenue.
KRIS: How did you know that that was, that was a product that you needed to work on? You said you experimented with a bunch of different ideas. But how did you know once you hit the idea that you needed to run with
Didier Elzinga: Because customers were buying it? Yeah, I mean, you just get better at going. All right. Like it's not. And this is a mistake I think some people make, which is that they're doing customer discovery. So it's good to do research, it’s good to listen to customers, it’s good to interview them and try and work out what the real problem is. But then sometimes people get caught up trying to get the customer to tell them what to build and they're never going to tell you because they don't know. But you do have to validate your idea. So what happens is you go sit in the corner, and you dream up what you think the world needs. And then you take that idea, and you go pitch it to people that should buy it. And you say to them, Look, this is what I want to build. If I build this, will you buy it? And the answer to that question tells you whether or not you have a product. And it sounds easy to say somebody said, Yes. And of course, you hear a lot of nos and you have to kind of listen to why they're saying no. And one of the things we learned on the first product was the thing that kills you is when you go and you show somebody and they're like, oh, this would be awesome, if only it had dot dot dot. And so like the classic one I was actually talking about the team on this the other day is that people like oh, this would be amazing, but only if could it just be integrated with my calendar. And for me, that's actually a death knell. Like what they're saying is it's not working that when you have a startup that's going to work. People are going to buy. And by buy, it doesn't have to be money, for some people just spending time is more valuable than them paying you. But it means that they are using it in spite of the product, not just because of it. And obviously you have to build a good product. But what you're looking for is that you found a pain point that is painful enough that there is no solution. And if you come along and just show somebody something that half works, they're out jumping out of their skin. And that's what you're looking for. And that's what took us a little while to realise that that's the thing that we needed.
KRIS: How are you letting people know that you existed? Like, what was your marketing strategy in those early days?
Didier Elzinga: Anything and everything. You know, as we started to build it out, I was fortunate because I'd been a CEO, I had some good networks and so I could go reach out to those people. I used to be a member of a thing called TEC which is The CEO Connection, the executive connection. It's called Vistage, TEC. So I was already actually on the speaking circuit talking to CEOs anyway. Our very first customer, which was Save the Children. Our very first paying customer, Save the Children, our first customer was Make a Wish, which was a not for profit, deal. But Save The Children came through the CEO, Susan, her son and my son went to school together. And we were chatting at a school event and I was telling her what she was doing. And she's like, Oh, this is really interesting. I'm actually trying to tackle that problem right now. So it's like it comes from wherever it comes from. And you know what, there's lots of downsides to trying to do a startup and kids. One of the upsides is you get to meet lots of interesting people in the schoolyard. And so it came from that, as we started to get a bit more success. We started getting traction in the US. And we won some of our early customers because somebody that I knew in Melbourne was now working for a US company, and he told them to look at it, and then they become a customer. And so we started spending more time in San Francisco. And we would literally fly over there stay in the lowest rent hotels you can imagine, which is pretty low rent in San Francisco. We used to go to this, there was this kind of place called Sugar. It was a cafe slash bar. And the reason we liked it was that it was open from… it was basically open all the time. And it had both cheap coffee and cheap beer. And so we would sort of house ourselves there, pull out our laptops, and we would make a game of cold emailing CEOs and Heads of People to see who could get a meeting. And so like I remember Jason and Jon and Doug and Ron and I are there going I'm going to try this I'm gonna use this angle, let's see what happens and, you know, ten things would go out. Jon wrote this really cool little app where he realised that it's with subliminal messaging when you reach out to somebody if they've seen you on LinkedIn, and they feel like they know you. And so what he did was he wrote a little thing that would basically crawl LinkedIn, and look at all these people's profiles so that your face would appear in their profile saying this person looked at you. And it was amazing how effective it was, because we would reach out to people and they're like, Oh, yeah, I've heard of you. And they only heard of you because we stalked you. We hit the LinkedIn right limit, so we weren't able to, you know, scale that otherwise we may have turned it into a product.
KRIS: That's amazing.
KRIS: As a startup, your role is to make sure your customers know you exist. But once you reach out to them - you also have to sell them on your idea. Often this is a balancing act because you want to get great clients, but you don’t want to waste time and money trying to sell clients on a product they aren’t ready to buy. For Culture Amp the sales pitch was about identifying the pain points and showing their prospective clients that their platform was the right answer.
Didier Elzinga: So we were saying to people, look, culture matters. And if you're going to make it matter, you have to measure it, and you have to bring data to bear. And we still say it to this day. Why is it that you know so much about somebody who might buy a hamburger from you, but you know, so little about somebody who's been working for 10 years? And there were people that were very receptive to that and they were looking around going, Yeah, how do I make this better? And you know, Jason, who's our Chief Scientist, he had worked for people in the employee engagement space. He worked for Towers Watson, he worked for Connexer. So he knew how to do all this stuff. And he’s saying to them I've been doing this for five years, and here all the problems and here's why, you know, Culture Amp solves those. And that for us was the telling point was people like, yeah, even though you're a startup, even though you're a small place, we still want to try this, because if this works, this is what we need. And one of our early customers, this is nine months into this product, we won Adobe as a customer. And we still have them to this day as a, you know, big global brand, and we've done a lot of great work together, and they're an amazing team. I remember when we won them as a customer, they had more people on the team working on working with Culture Amp, then we had in the company. And what's interesting is that if you go back, like four or five months earlier, we had a call so Jon, one of our co-founders. He was in Toronto at the time, I think, somewhere in Canada, staying at his brother's place. Doug, Rod and I were here, and we've got an inbound. So we had a website, someone from Adobe reached out to us. Ellie Gates and Donna… No it was Ellie Gates who reached out to us and said, Hey, you know, I like what you're doing. Can I take a look at it? We did some demos over the web. They're like, this is great. And then reached out and said, Look, we've got a big meeting with all the HR leaders. Can you come and present to us in San Jose? And so we had a call to decide whether we should spend $400 on an airline ticket to go to San Jose. And it was a robust discussion. Because there was not broad agreement that this was a good use of the limited amount of money we had. But we ultimately ended up going it was like a 51/49 lineball call and we're like, wow, what the hell, we should do it. So Jon paid the 400 bucks and went and presented to them. We didn't actually think it would turn into anything. You know, a little bit later we had Adobe as a customer. And what we found out later is that Ellie, who, who's the the woman who was leading the engagement project, through the whole process, I remember just before we got the deal, I was actually at my best friend's wedding, and I had this call with them and they're like, all right. We love everything. But can you, can you make sure that we're comfortable that you can deliver this, like there's a lot riding on this? And I remember at the time, like I was late for the bridal party rehearsal thing, and I just I didn't lose my temper, I just kind of said, Look, I've worked for Hollywood, I've, I've had Spielberg yelling at us saying, we have to do this, that or the other. I will get it done, no matter what happens, we will get this done. And I think that was just enough to give them the confidence. And Ellie told us years later, that she made the call to go with Culture Amp. She said, We're going off the vendor we're on we're going to use Culture Amp, her mentor at the time said, Ellie, this is a career limiting move. If this goes wrong, you will you will, this will not look good for you. And she said, I believe in these these guys, I believe in this team. And so early on, you need that, you need customers that have the problem you're trying to solve. And then you just have to show up and you have to convince them and it goes back to what I said earlier about the skill in convincing people you have no right to have come and want to work for you, you also have to have somehow convince customers you have no right to yet have, to want to work with you.
KRIS: You talk a lot about, about story. And that being a really important aspect. And how do you think that your career in film influenced your ability to tell an engaging story about your business at Culture Amp?
Didier Elzinga: Massively. I don't think I realised at the time, but it's funny because I think I, I spend more time thinking about storytelling now than I did when I was in film. But there's a huge parallel between the two. And funnily enough, I was I gave a presentation once and somebody said, Oh, you know, what's the one book that you think we should read? And I have a big book list and I love reading and I'm always suggesting books. And I said, I was thinking about I said, Hero with a Thousand Faces, Joseph Campbell, because its core mythology. And, and I still hold to it, but somebody came to me. It's a little dry. I said, maybe, maybe read the Bill Moyers Interview with Joseph Campbell instead because that's kind of like a nice access to it. But no, I think I learned a tonne in Hollywood around how to tell stories and one of the things that I've been able to use in the HR world is that I in turn now get to teach people in the HR world how to do this too. So a lot of what we do is actually help people. How do you tell stories with data? How do you help people do things and you know, I say people say I everything has to be ROI. ROI is cognitive dissonance on the decision you've already made. You got to get people at the heart. You have to give people a reason to want to believe there is nobody better in the world of doing that than Hollywood, there's a lot to learn.
KRIS: And we’ll be back with more of Culture Amp’s story, after this quick break.
KRIS: Culture Amp was breaking into the international markets, and they’d landed Adobe as a key customer. But it still took them four years to get to a million dollars in recurring revenue. And in 2015 they decided to raise their Series A of $6.3 Million dollars. So given the company was already making consistent revenue, why raise money at all, from VCs who demand scale and returns?
Didier Elzinga: So we were fortunate because we were starting to win a lot of companies in the valley. And so I was already talking to a lot of VCs. And one of the things that gave me pause was, if we were going to raise money, I wanted to do two things, not just one. So anybody that wants to raise money has to have a business model, and a business that is investable, that can be scaled. What was important to me and what is still fundamentally important to me at Culture Amp is not just that we built a successful company. So we'll get to 100 million in revenue in the not too distant future. We're not very far away from it. That's great, it's a nice number in the valley. What I care about more than that is what type of company are we at 100 million. You know, are we building a culture first company at scale? And the question for me was, if I'm going to take money from somebody, I need to know that they believe not only in building a successful business, but they build in believing a successful business the right way. And by the right way, I mean my way. Because we do some things a little differently because we believe in a different world of work and a better world of work. And so for example, famously, we don't pay commission to salespeople, and I can talk about that and why we do it. So I was cautious about raising money. We were cautious about raising money. We've had a few discussions, we had some conversations. We knew a fair amount about the valley because we have a lot of customers there. And what happened was, I was actually in San Francisco with Jon, we were on our way to, we were going to go to the bridge school benefit, which is a concert that's put up there. And I get this email from Aydin Senkut at Felicis. And he says, the last three board decks that I've had had data from your company in it, who are you and can we meet. And so Jon and I kind of rendezvoused on a Saturday and caught up with Aydin in Palo Alto. And he sort of explained, he was like employee number 200 something at Google. He was a CFO of a Turkish pharma company before, but he did a lot of their expansion. And he was one of the first VCs that I had spoken to, who truly believed you could build a great business outside of Silicon Valley. And he gave us a lot of confidence. And so we started chatting. And then, as the months went by, we had a advisor meeting so Scott Farquhar was an advisor of mine and Paul McCarney, and both in Sydney, we, Rod, Doug, Jon and I flew up to Sydney, we had a it wasn't a board meeting, but an advisor meeting and we talked about everything. We said, Look, we think there's an opportunity here for us to go faster. We think it's an opportunity, something well, what does everybody think? And Scott did this, you know, really good speech where he basically said, Look, if you've got product market fit, you have no competition, you have clean air, put the foot down, go for it. And so we said, All right, we should do it. And we said, Here's roughly the terms that we think we should get, here’s the valuation, we think we should be able to get, and it was like if you can get that. Do it. That's that would be fantastic. You know, not sure you can maybe you have to change it. Get in the taxi, we’re on the way to the airport. My phone rings. So I'm sitting between Rod and Doug and Jon’s in the front seat. And I take the call. Yeah, yeah. Okay, cool. That's great. What are the numbers? Okay, cool. I've got the term sheet that we just talked about. So Aydin had basically called me and said, I want to put a term sheet on the table, here are the numbers, we ended up negotiating a little bit. And off we went. And for us, it was just, if we don't do this, are we going to be able to execute on that mission and vision? That was really what it came down to. And we just felt like, we could do it without it. We could keep bootstrapping the company, we were cashflow positive. But we weren't going to get there fast enough. We weren't gonna make a bigger difference in the world. We weren't going to get to 100 million and today we know we the way we talk about is we don't measure our impact in terms of dollars we measure in terms of people. And so what we're focused on is, what does it mean to amplify what 100 million people are capable of being and that's the next five to ten year journey and we couldn't have done that without VC backing.
KRIS: Do you think there's too much of a focus on VC backing in the startup world in that a lot of people see it is like this is the path to success. But at the point that you guys took VC backing, you already had a sustainable business.
Didier Elzinga: Yeah, look, I think it I don't necessarily know that the focus there's a problem with a focus on VC. I think there's a definitely an unhealthy focus on fundraising. So one of the things we always talk about it like, you know, I've raised quite a lot of money, which is crazy, because I don't really like doing it. And when we do it, and we close it like, the first time I think it was our Series B or a Series C, we close it and went all right, cool, done. We had a little conversation about it. And I got up and said, Let's not celebrate raising the money, let's celebrate what we do with it. And one of the people that had joined us was at a previous company was like this is so different. He said, like we used to have the biggest parties when we raise money. Raising money doesn't mean anything. It doesn't prove anything. The companies that raised the most money don't win. It's what you do with the money that matters. And so I think there's an unhealthy obsession on raising money and not enough of an obsession on what you do with the money. The other thing is there's definitely an unhealthy obsession on growth and speed. I remember doing an Ask me anything. And somebody said, they kind of pulled out their data and they said it took you four years to get to a million, what could you have done to do that faster? I can think of a lot of things we could do to do that faster. But I actually think it's the wrong question. Because early on, you get to a million faster by doing a bunch of stuff. That doesn't mean you have a better business. And I don't think there's a huge correlation between how fast you get from zero to one. And how successful business is. Once you get to 1 million, getting from one to 10 quickly, is much more predictive of whether you're going to get to 50 or 100. So there's a certain point at which if you're growing, you just need to put the foot down and go for it. But early on, I think it's better to spend your time going, are we solving the right problem? Do we really have a customer? Do we have product market fit those types of things?
KRIS: Culture Amp has now raised almost 160 million dollars, and their Series E round in late 2019 valued them at more than a billion dollars. Throughout their journey they’ve expanded into a bunch of international markets, opening offices in San Francisco, New York, London, and of course their home base is in Melbourne. Opening a new office offers a lot of possibilities for a business looking to move into a new market and put boots on the ground. But how do you decide where your company should even be?
Didier Elzinga: So we we sat down, and we said, What are the most expensive cities in the world? For us to have an office? Where is it going to cost so much for rent that we're going to blanch every time we have to… and we chose those? That could have been the case if you look at where we ended up? No. We, off series I, we opened our San Francisco office. And that came down to the fact that basically, we had customers in San Francisco. And we wanted to learn how to be a great global growth business. And that's where global growth businesses are built. So we opened there. When we did our Series B, we opened our New York office. And that once again, was that's where our customers were, I mean, there's a huge concentration on the eastern seaboard of the sorts of companies we target and then the following year, around our Series C, we opened our London office funnily enough, we opened our London office the day of Brexit, oh my gosh, that’s a whole nother thing conversation we can have. London for me came from the fact that from the beginning, it was I want to build a global business. And I think one thing is that in the US, it's really easy to be quite myopic about only building a North American business. North America’s still, like almost two thirds of our revenue. But from the beginning, I wanted to build a global business that meant Europe obviously means Asia and other places, too. So that's where it came from. So every year we open a new office. And then the fourth year, I was very happy not to.
KRIS: Culture Amp now has a team of close to 400 people, and they’re continuing their rapid expansion. So how do you deal with rapid growth in a global business?
Didier Elzinga: As best we can. I think one of the things we decisions, one of the ways we run the company is we try not to be a headquarter with satellite offices. So often people say, Oh, so you have go to market in those offices, yes. But we actually think about it in a bigger way. So I've half my executive in San Francisco, half here. You know, we have key people around the place, and we try and think about really being one company in multiple locations. It's a huge challenge. I mean, we run an all camp or an all hands. And, you know, first it was just San Francisco and Melbourne that was pretty easy. And then we had New York, which made it a bit more complicated when we brought London online with that broke because there is no time where everybody can be online. So we had to change that. And one of the things we did is we said Set up a cadence where it oscillates between the different time zones. And there's an office that it's not expected to be online and they watch it on replay. And what was critical was that that was true for all the offices. So even though Melbourne has half the company, there is a every third or fourth, it's every third because the way we do the time zones, every third all camp, Melbourne’s offline. We didn't say, here are the two time slots we’ll oscillate between evening and afternoon to catch US and Europe. And so that was really about trying to equalise that. Yeah. Are we perfect? No. It's a constant challenge. Making sure that if you're the smallest office, or you're the furthest away, that you feel like you're getting the same experience that other people have. And it's not something that we've cracked the nut on yet.
KRIS: How do you deal with things like communication?
Didier Elzinga: Get up early, go to bed late. I mean, it's hard. It's just really hard. You know, that's the nature of working in a global world, though. And one of the things that I've always said, when I hired my execs in San Francisco, one of the things I said to them is like, I don't want the distance to be your problem. I'm happy to take calls at six in the morning I'm happy to do whatever needed to make this work.
KRIS: So you talked, you talk a lot about this idea of building culture first companies. What do you mean by that? And why is it so important that companies focus on culture in the first instance?
Didier Elzinga: I have a slide that I often use, which is tangible versus intangible asset backing to the S&P 500 since 1975. So in 1975 80%, of the value of the S&P 500, which is one of the indexes in the American Stock Exchange, was tangible. It was the factories, it was your inventory, it was the cash. It was things you could see. Now, that's 25%. And so what's happening is the value we're creating in the businesses we have is increasingly intangible. So some of that is brand and IP and other things, but a lot of it is in the heads of your people. So when you look at it that way, most of the value that we're creating in our business comes from the minds of the people that work for us. And back in 1938, Henry Ford said, “Why is it when all I want is a pair of hands, I got a brain attached”. That's the tangible way of managing the world. The intangible way of managing the world is to realise that you need the brains not the hands. And so for me, that's really what drives this, and why this is so important is it's almost logically obvious. Most of the value is intangible, the intangible comes from people. Working out how to maximise what those people are capable of, working out how to amplify what those people can be, that's how you generate the most value. And I think that's the positive side. The positive side is that's where the opportunity is.
Didier Elzinga: The flip of it, the negative version of it is that if you think about x hundred years ago, all you had to do was make money. Didn't matter if you destroyed the environment, didn't matter if you trampled over people's human rights, you just had to make money. As time has gone on, we've realised that kind of sucks. And we really need to hold people to account to more. You can't destroy the environment, you have a duty of care to the people that you have. And even just last week, the Business Roundtable in the US came out and said, We believe that we need to update the definition of a corporation to have to do more than have a fiduciary duty to shareholders, we need to put people into the equation. And so that's driving it to there's a carrot and a stick. And so what does it mean? Like Okay, cool. Culture’s important. And so culture first means putting culture first because we believe it's the biggest opportunity you have. And so will what is the culture of this company look like? I think there's probably three things that we think about. The first one is that is foundational. It's kind of what I was just saying, the culture is there. Whether you choose to implement it or not. The results you get in your business are the results of your culture. The culture is what’s driving it and you know, we're not the first people to say this, you know, culture eats strategy for breakfast, you know, all those sorts of things. That's what it means it's believing that culture is foundational. The second thing is culture is relational. It is the way we interact with each other. And you know, there are a hundred definitions of what culture means this, the anthropological definition, the IO psychology definition, but I kind of like this idea that culture is how things are done around here. It's how you and I interact, what the norms are, what's acceptable, what's not acceptable. And then, most importantly, culture is alive. It's something that changes, it’s something that grows, it's something that powers things. And so, for a company to believe in culture first, it basically comes down to do you think culture matters? Do you think culture is the source of competitive advantage? And if it is, what are you doing about it? And I think back and a lot of what we do is learning from what's happened in marketing and brand. And Gary Bertwistle, who's an amazing brand thought leader here in Australia said to me once, “brand is what happens in your customers brain when they hear your name or your prospects brain when they hear your name, and you can choose to influence it or not. Marketing is just trying to influence it.” Trying to influence what's going on, culture’s the same thing, like the culture is there, whether you do anything or not being culture first is just saying I want to be intentional about what that experience is.
KRIS: What makes a good culture?
Didier Elzinga: I think the first thing is to recognise that there is no perfect culture. That's a cult. You know, it, it has to be appropriate. It has to be right for the situation. So I like to say brand is a promise to a customer., culture is how you deliver that promise. So how do you connect these two? How does the culture you're creating, underpin the business you're trying to build, you know, in one organisation, and incredibly thrifty frugal almost mean culture would be toxic, in a different situation that's the foundation of an amazing business. And so it's it has to be appropriate. And I think intentionality for me is the most important thing. And it's where I come back to brand. Like there's no universally great brand. If you try to be everything to everybody, it's horrible, great brands stand for something great brands turn some people off. Culture standsfor something. And for me, the kind of core of it is a great culture is one that makes you want to be a better version of yourself. And so if you if you remember the film, as good as it gets, and there's, you know, Helen Hunt and Jack Nicholson and Jack Nicholson's this borderline personality disorder writer who's struggling with all these things, and he ends up in this relationship with Helen Hunt. And he's being not very nice. And a certain point, she's like, why are you doing this? Like, let's just give it up this what's the point and he looks at her and he says, Because you make me want to be a better man. That's why I'm doing this. And so for me, a great culture is one that for the people that turn up to work, that culture makes them want to be a better version of the person they want to be. It's not brainwashing, it's just an opportunity.
KRIS: Do you have any advice for companies that are, you know, starting their journey or maybe sort of starting to hit this growth phase where companies are likely to run into problems with culture, especially around you know, as they start to scale as businesses, to incorporate values that actually embed a good culture into the company?
Didier Elzinga: I think one of the things that the foundational ideas that we built culture upon and it's inherent in one of our values, which is learn faster through feedback, its inherent in why we built the tool is this concept of Learn, Act, Repeat. Learn, act, repeat, learn, act repeat. To commit yourself to the process of listening. First of all, you don't create culture, you uncover it, the culture is already there. And so what you're doing, you know, it's this, this is all power story of finding, carving a bear out of stone. And the person goes down to the, to the riverbank and looks for the stone. No, not this one, not this one. The week goes by and then on the, on the fifth day picks up a stone, and it was a stone that I picked up before and they hold it there Look, and here it is. Now all I have to do is remove the bits of the stone that are not the bear. And so the idea is the bear is already in the stone, you're just taking pieces away. So the first thing is you have to learn to listen, you have to go listen to your people, you have to uncover what is already there. Once you uncover that, you go through the process of going okay, what have we learned? What can we do differently? How can we maybe embed this more, or how can we talk about this, or how can we make this work for ourselves, and then you listen again. So it's like committing to the process. It's not a one shot, it's not going to happen once. And it's really about intentionality. And it's about holding up the mirror and being accountable for what you see. And so too often I think people look at it and go, I want a high performance culture, like sure so does everybody. But high performance at what? And what even over what? And what does this mean? Like what are you willing to sacrifice for and why? And why will your people care? Because it's only if you can create a place where people go you know what, I believe in what you believe in, and I'm willing to hurt and hopefully not physically but I stay a little longer than I might otherwise you know, one way of measuring the what I what you call engagement is what I call a five o'clock test. Persons walking out the door, it’s five o'clock persons walking out the door and the phone rings, do they pick up the phone or not? That will tell you a lot about how they think about the company and fear will not get them to pick up that phone.
KRIS: And what if you do hold that mirror up? And you don't like what you see? What do you do?
Didier Elzinga: First of all, congratulate yourself for actually looking and not seeing past it. Like, the truth of it is that, unlike almost every other metric in a business culture is not up and to the right. There's no, if it was good at five, it'll be better at six and seven, and eight and nine. So it's not just a matter of going, how good are we? It's about going, alright, what's working, what's not working, and what can we focus on and how can we make it better? And I think what the good companies do, is they keep constantly asking this question of what is the experience we want our people to have, and measuring if it's occurring. And they're not saying we want people to be happy. Happiness is a part of what it means to be human. There's a great book called The Happiness Trap… and he talks about the fact we pathologize being happy. And funnily enough, the pursuit of happiness is what makes people unhappy. Sometimes. It's like, our job at work is not to make people happy all the time, our job is to give them meaningful work, to help them feel like they're being grown and developed and listened to, and they have a place to belong. And sometimes that will lead to them feeling happy, hopefully, they'll feel happy more than they don't. But we're not saying I want you to be happy. What we're saying is, in this culture in this company, for these clients with this brand, this is the type of organisation we want to be. These things are important. And if you're not getting those things we want to make sure you do and so it's really shifting it around and not thinking of it as an entitlement thing, but just thinking it is a in the same way as brand. How do you want your customer to feel when they interact with your product, turn around have the same thought about how you want your people to feel when they interact with your company.