7 Principles from Ryan Carson’s Life That Will Help You Succeed

ryan-carson-speaking

Our very own Ryan Carson gives a talk at Creative Bath about 7 principles from his life. The topics are:

  • What’s worked for Ryan
  • The 4-day work week at Treehouse
  • How we run the Treehouse team
  • Ryan’s failures
  • Ryan’s daily routine
  • Venture capital
  • KPIs and dashboards

And if you can’t see the video below, check it out on Vimeo.

Ryan Carson’s talk at Creative Bath from Treehouse on Vimeo.

Resources:

Campfire
Trello
GoToMeeting & Skype
Team Gantt
Google Apps
TriNet

Video Transcription

. . . everyone. How are you all? Good. So, I’m Ryan, as you
probably figured out and it’s an honor to be here. I think a lot of you
deserve to be on the stage more than me. So, tonight’s format is going to
be a lot different. So, first of all, I want to get to know you guys and
then we’ll jump into that.

So, who is involved in the Internet space, design development, anything web-
related. Raise your hand for me. So, a lot of you. Okay. Cool. That’s
almost everyone, wow.

So, if you’re not in that space, why don’t you just shout out the name of
your industry, what it does, just a couple of you and we’ll . . . Go for
it. Accountancy. Okay. Cool. Lawyer. Great. Accountants, lawyers. Anyone
else? How about up top, anyone non-web? Pure web. Nice.

Questioner: National Trust.

Ryan Carson: National Trust?

Questioner: Yes.

Ryan Carson: Wow. Cool. National Trust is great. Anything else?

Questioner: Accountant development.

Ryan Carson: Accountant development? So is that . . . What is that?

Questioner: [inaudible 00:59]

Oh. Cool. So, it’s sort of recruitment-is.

Questioner: Not really, more about just developing people [inaudible 01:07]
creative space, especially [inaudible 01:09]

Ryan Carson: Okay. Great. Anything else?

Questioner: Publishing education.

Ryan Carson: Publishing education? Good. Okay. Good. So now I kind of know
you guys a little better, which is useful and whose from Bath? Who lives
here in the area? Lots of you. Great. Including my beautiful wife. There
she is. Okay. Good. I just wanted to figure out, kind of, . . .

And who knows me or reads my blog or follows me on Twitter? Okay. Because
that helps me . . . I don’t want to bore you by saying things you’ve
probably already seen. Okay. Great. So, let’s get started. I’ll tell you
little bit about myself first. Then, I’ll talk about what were going to
cover tonight.

As Greg mentioned, I’m running Treehouse right now and I think Fay is here.
Yes. Fay, one of our team members who lives here in Bath. What Treehouse
is, is basically an online technology school. So, who here is a Treehouse
member? Yes. I love you guys. Thank you very much. Awesome. So, this is
just the way to learn how to make websites, build websites, build iPhone
apps, etc.

Brief Bio

I’m 35, or almost 35. I was born in Colorado and I moved to the UK in 2000,
wanted a bit of adventure, was going to stay for a year and then met her
and am very happy. I’ve been here ever since. I have two beautiful boys,
two and four, almost two and four and I live out in [Chakawick], so not
quite in the city center but . . . I have a Computer Science degree,
graduated in 2000 and I worked as a web developer by doing PHP. Yes. For my
sins. Then, basically, in 2004, I started my first company. That sort of
morphed into another company that I sold in 2008 called [DropSend] and then
that sort of morphed into the events business and Lisa is here and she
works with us. We eventually sold that last year.

So, I sort of . . . I didn’t mean to be an entrepreneur. I sort of ended up
doing that. I didn’t plan on selling these businesses, necessarily, but it
happened and I’ve learned a lot through that. Now, I’m doing Treehouse and
I don’t intend to sell Treehouse because it’s probably the first thing I’ve
done that I’m insanely passionate about and really, I’d die happy doing
this.

So, tonight’s going to be a series of 10 minute talks. So, I’m going to
talk about six things for 10 minutes each and then during those 10 minutes,
I’m going to talk for 6 minutes and then I want you guys to talk for four
minutes. So, what that means is, I’ll go over something, and I want you to
be thinking about your questions for your feedback or your opinions and
then I’ll open up the floor for four minutes.

To give you a little context because, in case you don’t know me, this will
help you understand where my experiences come from. So, I started off as an
employee. I started my first company in our top bedroom at our house. The
first employee we had was my wife. I convinced her to quit Future. Sorry.
Then, we built that business up and hired Lisa, I think, our first official
employee and grew that business. In the meantime, we built this business
called DropSend and then eventually sold that and grew that. Then, the
events business grew up and then we sold that. Now, Treehouse is here and I
explained that. But, Treehouse, thankfully, has gotten quite big. We have
12,000 full-time students now, at Treehouse, all around the world. We’re
doing about $3 million in revenue. We have 55 full-time people and our main
office is in Orlando and we have people around the world. So, it kind of
gives you a feel for my experience and what I’ve done first.

I want to talk a little bit about what’s worked for me. So, I don’t know
why you’re here tonight. I don’t know if it’s because you think I’ve done
something interesting or you think some of the companies I’ve run are
interesting or just a friend brought you and you wanted beer. I don’t know.
But I want to talk a little bit about what I’ve done that has worked for
me. I just saw the guy with the mustache-beard thing. It was awesome.

I would say the primary thing in my life that drives me, that has allowed
me to succeed, is a sense of naive optimism. So, as an American, I think
that comes easy. We’re fairly naive and fairly optimistic about things but
it’s actually a real asset and I’ve lived here long enough to . . . I have
British kids now. Like, I feel British, in a sense, and I understand that
that isn’t something that always comes naturally to this culture and that’s
fine. I think there’s advantages to not doing that but most of what I’ve
done has been . . . Hey Jean. . . . Has been . . . Because I didn’t know
how hard it was going to be and I didn’t let myself think about it. So,
it’s more of a thought like, “I think this is possible. I have no idea how
hard it’s going to be but let’s just do it before we realize how hard it
is,” and that has served me well. It’s almost reckless, I would say.

There’s been some businesses that I’m going to talk about later that I
failed and that’s probably because I didn’t even think about what was
necessary for success in those businesses. So, I would encourage you, if
you have an idea, try to execute a couple things on it before you start
worrying about the implications of it. Before you think about the money or
the failure, or anything negative, just start doing a couple of things and
see what happens. So, naive optimism.

In general, a lot of things that have worked for me in business are just
because I like being friendly. So, what you’ll find is some people think
that businesses about being, sort of, mean or aggressive or it’s all about
winning but, actually, most of the success I’ve had is because I’ve ended
up having a beer with someone and we became friends and we can talk and
they don’t feel threatened by me. People just want to be around nice
people. So, that’s something that’s really worked for me. I’m actually
fairly introverted. I was quite nervous back there before I came on. So,
it’s not as if I’m a gregarious, outgoing person all the time. It’s just
that I enjoy, sort of, connecting with people on an individual basis, and
thankfully, that usually yields good things.

Building Credibility

One thing that has allowed, I think, the various businesses to succeed that
I’ve done is having credibility in the core business. So, we have
accountants here, lawyers, lots of web developers and designers and
entrepreneurs. Why it worked for us to have an events business based around
the web industry and, now, teaching, (not teaching that), teaching web
design development, etc., is because I have a Computer Science degree and
it was kind of in my blood. So, I could speak and have some authority and
for some reason people want to follow me on Twitter, etc., and I think it’s
because I knew what I was talking about, especially in the earlier days,
and I could talk about it. So, it’s important for you to have credibility
in whatever industry you’re in so that people will want to hear from you.
So, I think that that was part of the success factor.

What’s really working well for us now, is having a recurring revenue. So,
the next thing is a recurring revenue product. So, I’ve done a couple of
businesses now and the hardest one I ever did was events and it’s because
you have to do an event, sell the tickets, get sponsorship and then you
start all over. Greg probably felt this way about the magazine industry.
It’s similar [in] that, each issue, you’ve got to start over and you have
to push and get it done. That’s fine. Those are all good businesses but
now, I moved to a recurring revenue model, so we charge monthly for
Treehouse. So, you pay $25 a month and we have 12,000 customers. It makes
life just a little less stressful.

A lot of you are in the web industry and if you’re doing client work, you
can build products on the side. That’s not what you should do necessarily
but I think it’s something that you can think about. If you are an
accountant or lawyer or working with the National Trust, there’s ways you
can productize your business that will allow you to basically be happier
because it’s less stressful. So, Treehouse has been a wonderful business to
run and to be a part of because we have steady growth. It just kind of
grows and cash flow is not a problem because we know where we’re going. So,
that’s really worked and I would encourage you to think about if that’s a
possibility for what you’re doing. If you’re not running a business, if
you’re inside a business, maybe those things you can think about to
productize what you do.

So, the last thing I want to mention is meeting people in person. I didn’t
mean to do this but one of our events businesses helped me establish myself
as a leader in our industry and it’s because what would happen is we would
throw these events and then I would MC them and we’d invite people like
Mark Zuckerberg and Kevin Rose and always really famous people to speak and
I would be on stage with them. What happens in the human psyche, it’s like
a hack, is that the audience assumes that you know as much as they do and
it’s clearly not true, but there’s something about that that builds your
credibility. Then, you actually do build relationships with those people
and it opens up insane doors.

So, the way you can apply this is if you are in an industry and you want to
become known in that niche, then do a simple event, breakeven, and get some
people there to charge a little bit for tickets and become the host of
that. What that does is it gets people gathered around you. I mean, Greg’s
doing a great job of this with Creative Bath; he’s creating community
around Media Clash and that’s smart. That’s good. So, I think, I would
encourage you to try to figure out how you could do that for your business
or what you’re passionate about. It really yields benefits. It takes, sort
of, two or three years but once you can sort of get to that point where
people see you and know you, then it really, really helps.

Question-and-Answer Session

So, that’s just some things that worked for me. So, I’m going to open up
the floor now for any questions on that. So, the question is, you’ve got a
good service business and now you want to productize something. How do you
start in to get the first chunk of customers, which is the hardest?

All I can tell you, is how I did it because it worked for me. So, the way
we got our first customers with Treehouse was, we used our current
marketing channels. So, while we were running the events business, when I
still owned it, we had this idea: “Okay. Let’s do training with video.
We’re passionate about web design, web development. So, let’s do that.” So,
we launched what was then called “Think Vitamin Membership”. It’s now
Treehouse. We launched it at one of our events and I tweeted about it and
we had our various business units tweet about it. It was just enough to get
traction. So we got our first customers.

What happened there is, I spent years building up credibility and an
audience in a niche. So, that’s the problem; you can’t do it quickly,
unless you have a lot of marketing money. You could purely pour money on
that and say, “Well, we’re just going to buy ads everywhere.” Right? So,
have a big AdWords budget. Have a big display banner budget. So, you could
buy yourself out of that situation but that costs money. So, we did it
through social networking but the key is getting an audience. So, that’s
why doing an event in your niche works because you build an audience and
then you want your own product at your own event and it yields results. So,
I see a question in the back.

Questioner: At what point do you swap from using your credibility to then
using Google advertising and how much of the makeup of your incoming
business does the advertising yield?

Cool. So, the question is, when you swap from just social media and word of
mouth, to proper “Let’s spend a lot of money on advertising.” For us, the
answer was, “As soon as we could afford it.” So, we didn’t start buying ads
until we were profitable. So, with Treehouse . . . And I’ll talk about this
in the venture capital bit of the talk . . . Is we bootstrapped it. We paid
for it out of profit from our events business and also, actually, I’d like
to say a big thank you to Lloyds Bank because Lloyds was the only bank that
would give us a business loan when we needed more working capital. Our own
bank wouldn’t do it. I hate them forever. But Lloyds did. So, basically we
got to . . . As soon as we got to breakeven, and then we started making
profit, then it was, “Okay. Let’s just pour the money back in it.”

So, that’s basically what we did. It was good and if you stay small, on the
beginning, you can get to breakeven pretty quick. Then, after that, then
you want to grow. So, we raised $4 or $5 million this year because we just
want to dump money down advertising channels because we’re close to having
product market fit. So, yes, I wouldn’t do it until you can afford it.

So, the question is, I’ve done a number of businesses. Treehouse is the
first business that I truly feel passionate about. I think it’s a process
and you can’t just . . . Usually, the first thing you do is not going to be
the thing you’re most passionate about, unless you’re really lucky. So, you
usually do something that works, that you can get paid to do, that people
want and then you do that for a while and either it turns into something
you’re passionate about or you have to stop doing it, if you want to be
true to yourself and if you can afford to do that.

So, the reason why we ended up doing events is because I love connecting to
people. I love this. It’s great. Then, we get our first event that people
paid to go to and it turned into a business. But the reason I wasn’t
passionate about it in the end is because what I realized is that events
are expensive to attend, not everybody can go. It wasn’t something that I
can do to change the world in a way that when I die I would be glad about.
So, I would say it’s very important, when it comes to what you want your
life’s work to be.

Imagine your gravestone; what are the things that matter? I think we’re
lucky here. We’re clearly all wealthy, when you compare ourselves to the
world. You’re here. You have computers. You look well fed. So, I think
we’re in the upper 1% of the population. Right? So, the question becomes,
how do you then start doing something that matters that you’re passionate
about that’s going to make the world a little better? It’s almost your
responsibility. It’s hard to do that sometimes. Sometimes you have kids or
responsibilities or obligations and then that’s fine but, I think,
ultimately, . . . [Ring tone noise.] That’s the end of that.

Four-Day Week

All right, so let’s move on. So, the next thing that we do that’s weird is
the four-day week. So, everyone wants to know about the four-day week,
because it is weird. So, at all my businesses, since 2006, we have decided
to work a four-day period. So, Monday to Thursday we work the normal eight
hour day, nine hours with an hour of lunch. We give full salaries and we
give 19 days holiday, in addition to that. So, it’s kind of crazy. So, I
want to talk a little bit about that, why we do it and how it works for us.

Jill and I decided to do that one day when we were sitting on the couch. I
think I remember this right. We were running the business together and I
was totally stressed out. We were working, basically, seven days a week
because we didn’t have kids yet and we were working into the evening. I
think I said I was really stressed or something and she just said, “Well,
what is the point of running your own business if you’re working harder and
longer than we did when you were a web developer and I was working at
Future.” So, I guess that really struck me. I thought, “Yes. What is the
point? What are we doing?” And what I realized was that work never went
away. So, no matter how much I worked, it never stopped. So, there was
clearly no benefit to working more.

So, I can’t remember who suggested it, if it was me or her, but, somehow,
we came up with the idea, “Well, let’s just not work Friday’s.” She must’ve
suggested it because at first my reaction was sort of anger like, “Are you
fucking serious? Like, how are we going to . . . We can’t get stuff done
now. How are we going to get stuff done if we work one day less?” But, I
think that innate desire in me to be in control of my life and realizing
that I need to control how my life is, because no one else is going to do
it for me, kicked in. I thought, “Yes. Okay. We can do this.”

So, we stopped working Friday’s and I don’t remember how exactly it works
but, when we hired Lisa, our first employee, we had to solidify that into a
company policy. So, we did have a conversation like, “Wow. If we start
this, there’s no stopping now.” So, we decided, “Let’s work a four-day
week.” And it’s mainly because we work in information work. I mean, if
you’re an accountant or lawyer or anybody who’s not doing information work
it can be hard to work four days. So, what I want to say to that is, very
quickly, if you want to do it, you might have to time shift. Some of your
team might have to work Tuesday to Friday and that will cover the working
week.

So we started doing this and we’ve been doing it since 2006. Like I said,
now we have 55 employees. We do millions of dollars in revenue. So, it must
be possible. It must work but it’s scary. When we raised money the second
time, one of our investors didn’t participate because he basically said,
“You don’t take your business seriously enough. If you don’t work Friday’s,
there’s no way I’m going to give you money,” and I think that was kind of
sad because what that says is that we are sort of gerbils on a wheel and we
only get stuff done when we work more hours. My general belief is that you
guys are all smart enough to figure out how to do five days of work in four
days, if you really push yourself.

There’s definite drawbacks and I’m sure Lisa would agree and, Faye, as
well, that can stress you out. You basically have less time to do the same
amount of work. So, what happens is it gets really busy and maybe things
get cut out like hanging out or relaxing. So, there can be, I mean, not
always but I’m sure that somehow it is a bit more stressful because of
that, but man, there’s so many benefits. So, my main point in telling you
about this is for you to consider it. Is there some way that you can cut
back your working time.

If you don’t run your own company, it would be very hard to pitch this your
boss but there are things you could do and you could go to him or her and
say, “Obviously, you want results. Right? So, if I deliver you results,
will you give me some flexibility?” And get them to play ball with that
because, as a boss, I can tell you, all they care about is results. You
could work from Zimbabwe on the weekends, and if you deliver results, it
doesn’t matter. So, it’s more about, can you get what you want to get done
in four days at the same amount? Great.

If you run your own company, then clearly you could try this. It makes
recruiting really easy. We used to do this thing where we wouldn’t tell
people that we work a four-day week until like the second interview and it
was hilarious to watch their face because we would say, “We’re thinking
about hiring you. By the way, do you know that we work a four-day week?”
And they would start looking around for a camera. They’re like, “Is this a
joke? What’s going on?” and we said, “No. It’s real,” and that was always
entertaining but now we just tell everybody and it makes hiring really
easy. So that’s quite fun. So, that’s the four-day week.

You probably have questions about it. So, I don’t want to go on too much
more about the logistics but we do a couple of other things that are quite
generous and one is that we give a one-month paid sabbatical every three
years that you’re with us. We pay for your lunch every day. We give you an
iPhone and pay for your contract. We match your pension up to 6%. We give
you $5000 to set up your computer on your desk, etc. That all sounds crazy
but the truth is that people are our most valuable thing. So, why would we
ever skimp on people? It doesn’t make any sense. So, with that, I’m going
to stop early and just take questions about . . . Or feedback, if you think
it’s stupid. Then, let’s hear that as well. So, I’ll set the timer.
[inaudible 22:59] need jobs. We did, but we’re finally done hiring I think.
Sorry. Yes.

Questioner: The four-day week, how long did it take the current clients
that you have at the time, to stop calling you on Friday?

Ryan Carson: Well, so the question is like, when did our clients and
customers start realizing that? We were lucky in that we’re doing things
like selling tickets to an event and we didn’t need to be in the office on
those days. It was a little awkward with sponsors, because they would call
and they expect you to be around. I guess you have to set expectations and
say, “We’re closed on Fridays,” and see what they do, but probably, it’s
not realistic. I think, long-term, you need to like shift your team to be
covering all those days. So, any other questions or thoughts?

Questioner: [inaudible 23:51]

Ryan Carson: Yes. So the question is, “Do our salaries reflect that they’re
working four days versus five?’ No. They’re paid a full salary. The main
reason we work a four-day week is to give people the fifth day to do non-
work. So, the idea is . . . It’s pretty crazy, if you think about it
because, if you have an extra day, it actually gives you 50% more weekend.
So, what we want to do is we want people to spend that time with their
kids, or their loved ones, or learning how to play guitar or something.
That doesn’t always happen. I think we have to fight people not working on
Fridays because either they feel pressure or they want to show that they’re
kicking ass. So, we have to constantly fight that mentality, to say, “No.
We don’t want you to work on Fridays. If I start getting e-mails from you
on Fridays, like generally, I don’t like it.” Sometimes I would send e-
mails on Fridays, which would be bad, but that was a general thing. I’d
actually like to hear Lisa’s perspective, having left the company, if you
think the four-day worked or not.

Lisa: I think, because we stayed friends, and I continued to talk to you, I
think your approach and your control of it has matured. I think in the
early days, we had our iPhones and our laptops and we were encouraged to
take them home with us and, even though the office stopped at six, because
we were doing sort of transatlantic work, I often find that I’d be looking
at Twitter and e-mails and everything on a Friday, and often on the
weekend, and I think you’ve kind of tightened up on that quite a lot for
the work-life balance, but, yes, it was good not working Fridays.

Ryan Carson: Okay. Cool. I guess it kind of worked. Right there. Yes.

Questioner: [inaudible 25:29]

Ryan Carson: Yes. So, if you have a deadline, what happens? I do think
people tend to work Fridays, if there’s something, if there’s a big
deadline. There are sometimes things that you can’t move. So, when we were
launching Treehouse, I think our product team was working like seven days a
week. So, like, sometimes it does happen but I think what you have to do is
try to focus everyone early and say, “We’re serious. You’ve got to get the
project done in four days a week. So, don’t push it to the end.” In truth,
it doesn’t always work and you’ve kind of got to fix it. Here. Yes.

Questioner: If you ran the world, or the country, do you think everyone
should work a four-day week or does it only work because it’s different to
the norm [inaudible 26:11]?

Ryan Carson: Well, I think, in general, now we are too connected to work
and too connected to social media and I’ve only recently sort of come to
this conclusion. So, I think we would all benefit but the problem is it’s
not going to happen. So, if anything, people are going to work more and
more, forever and I think it’s sad. I had this big rethink. Maybe I’ll talk
about this later but recently, I’ve started tweeting a lot less and started
just . . . I disengaged from social media a lot and it’s because I feel
like I’m not focusing on the people who will matter to me when I die.

Maybe it’s having kids or something that does this to you but I’m like, “Oh
my gosh. There’s a core set of people in my life who I care about and if I
do not connect with them, and I connect to my Twitter followers, what the
fuck am I doing? It’s just crazy.” So, I think I pulled back from that,
now, a little bit but, I think, unfortunately, it’s getting worse and worse
and the iPhone is terrible for that. I mean, it’s so addictive. I actually
read a study where people are being diagnosed now with iPhone addiction and
it’s becoming very real. So, it’s sad but . . . But anyway, that’s a whole
diatribe of mine.

Running The Team

Ryan Carson: So, I want to talk about running our team. So, we do this at
the office, sort of run around poles and chase each other. No we don’t. So,
I get a lot of questions about how we run our team because we have, like,
55, 60 people. I literally work from my desk in Chakawick. So, how do we do
that? So, I’m going to run you through a couple tools that we use. This is
meant to be a very practical session and might give you some ideas for
running a team.

So, the first thing we do is we all hang out in a chat room and we use a
tool called Campfire, campfirenow.com. We treat it basically as a virtual
water cooler and the whole company is in there and we also have other rooms
for different teams. Basically, it’s hilarious. I think it’s one of the
best things about our company, interestingly enough. Sometimes I go in to
our chat room and I’m like, “Is anyone doing any work? Like, what is going
on in here?”

I’ll show you something. Basically, animated gifts come up in the chat room
all the time and it’s totally bizarre but it’s great for keeping people
connected. So, every one in the company is in this chat room and it appears
as if people are working but what’s happening is people are being human and
they’re talking to each other and they are working but I think we forget,
often, that people shouldn’t be working 100% of the time. Right? No one is
designed like that. So, the goal of the chat room is to keep people
connected but also because we’re all over the place. There are people in
California and the West Coast and East Coast in the UK and the US. It’s
just all over the place. So, it’s just a fun place to connect. So, that’s
campfirenow.com. It works pretty well.

We do quarterly meet ups. So, I think it’s really important to get the
whole team together, physically, face-to-face. So, every quarter, we all
fly into Orlando and we all hang out for a week. Last time we did work all
week. So, it was basically a week where we all worked in our Orlando office
but it’s so key to connecting. So, don’t undervalue that. It’s expensive. I
think that last quarterly meet up cost us, I think, like $25,000 or
something. It was a lot but the value that we got out of that was just
tremendous and it connects people. So, I would encourage you, if you work
for somebody, tell your manager that it’s important that you get together
and that you make time for that during work hours. This isn’t like, “Yes.
Everyone should go to the pub after work,” because that doesn’t work for
people who have kids. Right? So, during work hours, how can we connect
physically? If you run your own company, then definitely make time for
that, even if it’s only quarterly, like we do. So, that works really well.

We use Trello.com. I won’t show it to you but if you have a T-R-E-L-L-
O.com, basically it’s a tool that we use to manage all of our to-do’s. So,
it’s a simple way for everybody in the company to collaborate. So, it gets
you out of e-mail and into a system that allows you to easily see projects
progressing. So, it has this kind of . . . It’s called Kanban, K-A-N-B-A-N,
style of management and, essentially, it’s the idea that each to do is a
card and that card moves from left to right. So, as it’s going through a
project phase, you move it along. It’s a very visual, nice, way of seeing
projects come to completion. So, we all use that. Another alternative is
called Asana.com, A-S-A-N-A, which is quite good. It’s just not quite as
visual. So we really like that. I use it for my own personal to-do’s as
well.

The next thing we do is we use GoToMeeting or Skype a lot. So, I’m pretty
much on Skype or GoToMeeting all day and it’s just a way to have quick
meetings. It works out pretty well. I’d recommend using GoToMeeting if you
do group stuff because Skype doesn’t work very well for multiple video
chats but we like GoToMeeting. It’s about $50 a month. We use TeamGantt.
TeamGantt is a great Gantt chart tool. Who does not know what a Gantt chart
is? Yes. A couple of you. Okay. A Gantt chart is basically a visual way to
picture a project and it has the timeline, going like that, so that
January, February, March, April, May. Then, the rows are projects so, maybe
like “Redesign Website”, “Build New Tool”, “Marketing” and then you can see
visually who’s doing what, when and it’s a very good tool for visually
understanding what’s going on in your company and when. So, we use it for
our roadmap. So, I plan what the company’s going to do for the next year
and then lay it out on a Gantt chart and everyone looks at it and then we
can all be visually on the same page. So, that works out really well.
That’s at TeamGantt.com.

We use Google apps for infrastructure. It’s great. It’s almost free. So, we
use it for mail, calendar, docs, almost everything. So I highly recommend
that. Also, the last little thing I do is a weekly video update. So, the
idea is that people . . . I don’t talk to everybody anymore at the company,
which is hard. So, I feel it’s important for people to understand why
things are happening and who’s doing what. So, I record it. I use a tool
called Photo Booth on my Mac and then I just record a five to eight-minute
video and I just explain what’s going on in the company, “Hey, this is why
we’re doing this,” and “This is where we’re going,” and, “This is where
we’re at financially,” and just anything I think the people may not know.
Then, I record that and I put it up on Vimeo.com and I have it password-
protected. I guess people watch it so they can tell me if it’s any good or
not but I’ve gotten pretty good feedback on it, that people enjoy
understanding the big picture and because it’s hard to get everyone
together, it’s useful. So, that’s that.

So, any questions about tools or how we do things? Got a couple here. You
can just shout it out. I’ll repeat it.

Questioner: Do you have most of your team in Orlando?

Ryan Carson: I would say about 40%.

Questioner: Is everybody else home-based or [inaudible 34:09]?

Ryan Carson: Is everybody home-based? Basically. Yes. So, they’re all
spread around.

Questioner: Do you think there would be an advantage to having everybody
together?

Ryan Carson: Yes. Would there be an advantage having everybody together?
Definitely. I think in an ideal world, we would all be in a big building
and be able to talk to each other all the time. There’s a lot of friction
because you can’t find somebody when you need to talk about something.
There’s a lot of value to physically looking each other in the face and
understanding what’s going on but it actually enforces a weird sort of
efficiency. So, normally, when you go to someone’s desk and bother them,
and you can’t, then you tend to solve more problems yourself. So, I think
it encourages a bit more individual accomplishment. So, I think it
balances, but I know, sadly, we’re leaving Bath. We’re moving to Portland,
Oregon and when we move there, I’m going to open an office. I’m going to
get people to move to Portland because I want, I do want more face time.
It’s worked. Definitely, people . . . I think, if you want to work at home,
you definitely could pitch it to your boss as well and say, “I think this
is a good idea. I could be way more efficient. I don’t have to spend time
traveling. It’s amazing.” So, yes. There in the back of the . . .

Questioner: In terms of that bigger picture for your staff, how transparent
are you about financial information with them and do you share that on
quite a deep level?

Ryan Carson: So, how transparent are you with finances? Very transparent.
In the last update, I told everyone how much money we have in the bank, how
much runway we have, which means how long do we have until we run out of
money, etc. So, very transparent. I think people need to know it. I mean,
because if we run out of money, it’s really going to affect them. So, I
don’t want people to start feeling like stuff comes from a pie and they are
just minions doing stuff. They need to understand the bigger picture and
money is always a part of the big picture. So, it’s obviously confidential.
I say, “Don’t tell anybody this.” We just need to be know this in the
company.

I think part of that knowing how much runway we have is important because
it tells everybody, “Okay. Hey, we’ve got to get to breakeven here. So,
let’s get there. So, I think it’s valuable.” Yes.

Questioner: How do you know when it’s a good time to run the business as
opposed to perform a role in the business, so rather than the core function
of the business, with myself being in design, what stage do you actually
run the business and be more strategic and let all of the people do the
work for you?

Ryan Carson: So, if you own the business and your sort of . . .

Questioner: Yes.

Ryan Carson: . . . working yourself out of a job.

Questioner: Yes. Basically.

Ryan Carson: Good question. I think as soon as you know that you’re not the
best at it. I hired my first . . . So, I was a developer and I hired my
first developer when I realized I wasn’t as good as them. So, it was kind
of like, “Man, I can’t do this as well anymore.” Design is hard because the
thing with design is I think it is innate ability. I know a lot of
designers and developers who don’t want to become CEOs because basically
they won’t do any design or development. So, I think two things. So, when
you have money to do it and you want to grow the company, it’s clear that
you’re the bottleneck and is soon as you know that and have money to hire,
you should, but then also, you only hire people who are better than you.
So, when those two things are true, then I think that’s when you do it.
It’s hard though. You kind of have to like let go of things, which is hard.
You can let go but still maintain quality. So you can still be the judge of
whether things should go out the door or not. So, anymore questions? Yes.
Back there. Hey Tom.

Questioner: Who are your main influences in terms of these progressive
ideas?

Ryan Carson: Who are my main influences? There’s an awesome book. There’s a
Brazilian guy who ran a . . .

Questioner: Ricardo Semler.

Yes. Can you repeat the name of the book though? Do you know it? Is it
Semco?

Questioner: Semco, I think. Yes.

Ryan Carson: “Maverick”. “Maverick”, okay. Who’s read “Maverick”? Oh my
gosh. It’s so amazing. You have to read it. So, this is and guy in Brazil
and he runs his industrial factory thing and I think it was in the ’70s or
something. It was a long time ago. He had this ridiculous company structure
where everyone knew everyone’s salaries. No one had desks. The team members
judged whether their managers were going to get raises. It was just all
upside down and I thought it was awesome. Who else? I like Fred Wilson a
lot. He’s a venture capitalist. So, I read ABC.com. I think he’s just kind
of a no BS type guy but he’s also gentle and he’s human about it.

Questioner: [inaudible 39:09].

Ryan Carson: Jill notes that I read Mr. Money Mustache. It’s a great blog
about finances and basically, I think he’s 35, or 40 or something and he’s
managed to retire and the reason why is because he’s got his living
expenses to be very low. He just has a fascinating view on life and so I
read his stuff a lot. So, those are a couple of them. Those are more about
ideas. Visually, of course, I’m a big Mac fan and everything Apple. I’ve
got to call it quits on that one but, again, keep your questions and then
I’ll try to come back to them.

Failures

Next, I want to talk about failures. How cool is that guy? He’s diving onto
a crowd, in case you wonder what he’s doing. So, just embed that image in
your mind forever. So, I’ll talk quickly about things I failed at. It’s
easy for me to come up here and PR myself to make you think I’m awesome,
but the truth is I’ve had lots of things that didn’t work and I made lots
of mistakes.

So, the first company, really, that failed was called FlightDeck and it was
my first idea. So, I quit my job as a web developer and while I was there,
I made this tool called FlightDeck and basically it was a tool for sending
large files to your clients. This is back in the day when you couldn’t send
an e-mail over 2 Meg. It was 2004. I just said, “This is stupid. We need to
send large files. Can’t do it. Then, on the other end, they need to approve
it. So, let’s build a tool for that.” So, I build it, called it FlightDeck,
got my first customer that paid me £3000 which was, I thought, quite
impressive and I installed it, did an installation for them. So, I quit my
job knowing I had £3000 in the bank and I charged . . . I think it was £200
per month for FlightDeck and I went about trying to sell it. What I found
was that I’m terrible at sales. I hate rejection. I’m quite shy. I don’t
want to like push anything and anybody. The whole thing just petrified me
and I was terrible at it, but because it was priced high, £200, it had to
be sold.

I started failing. I had all these cash flow models that I talked to Jill
about and I’d say, “We’re going to be millionaires. Look at us go. I had
these spreadsheets, showing our revenue going up, and basically, it didn’t
happen. I started really dreading making phone calls and talking to people
about the products. I avoided . . . I started avoiding things on my to-do
list. I started taking longer lunches, that sort of thing. You’re like, “I
can squeeze in The Matrix, over lunch.” And I remember I actually did watch
The Matrix over lunch and then afterwards I was like, “Oh my gosh. I don’t
think this business is going to work; I’m watching the matrix over lunch.”
Jill was basically paying our rent and it was the worst thing ever to have
to go down, after work one day, and sit down and I remember the
conversation. I came into the kitchen and our kitchen was tiny. It was
about as big as this podium. So, it was like that. “I think this business
is not working and I don’t know what to do.” It was embarrassing because I
had all these big plans for it. I’m the man. I’m supposed be able to
provide and I was doing nothing like that.

So, we basically talked about it and what we decided to do was try
something totally unrelated. So we did our first workshop, which was a
simple workshop called, “How to Build an Enterprise Web App in PHP”, and it
sold out. So, we did that and brought in a little revenue and that was
something to do. It started bringing in money but we shut it down. What I
learned from that is not every idea you have works and maybe not even your
first idea will work but if it reaches a point where it’s not working,
you’ve just got to shut it down and admit it and also say, “It doesn’t
matter. The next thing will work.”

So, that was the first thing I did that failed. Ironically, that came back
and succeeded. So, what we did is we shut it down for a while and then we
did events and in those events started generating revenue and then we took
that revenue and we decided to resuscitate FlightDeck. I paid a designer
and developer to redo the entire thing and we switched to a model where
it’s $5 a month for the cheapest plan. Actually, it was free and then if
you wanted to send more than five files, it was $5 a month all the way up
to $99 a month. Then, we launched it and then that really slowly grew. I
think it grew to the point where it was doing like $25,000 per month just
because it’s very viral. You’d send somebody a file. It would e-mail them
and say, “Sent by Drop Send” and it just grew and it grew and grew and grew
and then we eventually sold it, sold it for like a half $1 million. Those
kinds of things can work. So, even though it failed, ironically, they came
back and it was a success. So, you never know.

The second failure we had was one called Amigo. And Lisa probably remembers
this. Amigo was this brilliant idea. I still think it’s pretty good,
actually. Still holding on. The idea is that it’s basically pay-per-click
advertising and e-mail newsletters. Sounds good, right? So we thought,
surely people want to place ads in newsletters. Everyone’s got newsletters
about biking or fairies or something and maybe you want to make money off
that newsletter. So, we launched it. We invested in a designer and
developer again, to build it. Then, we launched it, got in TechCrunch, all
those great things. We actually did a great blog which was Jill’s idea,
called “Bare Naked App” and “Bare Naked App” was a blog to document the
building of the app and at the time, that was quite innovative and we’re
very transparent about the process of building it. So, we got a bunch of
PR, launched it, and immediately what happened was I realized we were
creating a marketplace. So, if you’re creating anything that is a
marketplace, you have to be prepared for the fact that you have to build a
market on both sides, right, the buyers the sellers. So, eBay is an
example. eBay wouldn’t work without buyers and sellers.

So, what I realized was, “Oh my gosh. Creating a marketplace is really
hard. Either you have to throw a lot of money at it or you have to pick one
niche and just go after newsletters that are about mountain biking and
really own that and then grow.” I just had this terrible moment when I
realized, “I don’t care about this.” It was weird. So, I lost the product,
spent all this money and then I realized, “I don’t want to spend my life
trying to build a market around all these niches I don’t care about.” It
was a terrible moment and this is where my naive optimism backfired because
I didn’t really think through the product until we launched it. But, again,
it shows that the reason why it failed was because I wasn’t prepared to do
what it took to make it at least a certain point. So, I think you have to
realize that building a product is easy. Having an idea is easy. It’s once
you launch it and you have to market it and get traction, that’s the hard
part. You have to mentally know that that’s going to take your money or a
lot of time or both. So, those are why those failed.

So, let’s take some questions about failure.

Questioner: So, with the benefit of hindsight, do you think it helped your
other businesses succeed, having some fail? Because a lot of us that run
businesses, going bust it’s like we just don’t want to do that and we keep
playing with the same [inaudible 47:09] because we don’t want it to fail
but was it a liberating experience to have had a business fail and nobody
died.

Ryan Carson: So, was it liberating? We structure it in such a way that
these were products of companies. So, the nice thing is if they did die,
the entire company didn’t fold. So, that’s one thing I would recommend try
to launch products inside your company because you can just shut them down
without the terrible process of going into insolvency and all that kind of
stuff.

I think I could’ve quit, after the first failure. I think it was that
damaging, the sort of, “The my gosh. This is my first business and it
failed. I’m in my top bedroom. Like, what am I doing?” I think if I let
myself really feel that, I probably would’ve quit. I think looking back,
I’m glad I failed, but man, going through it was really, really hard. I
felt emasculated and sad. I mean, it was just terrible but as soon as it
was over and something next was starting to work, I immediately realized,
“Oh, I could survive it.” And once I survived it, it was better. So, I
failed two businesses. I’ve sold two businesses and now I’m running a big
business that’s lots of fun. So, you kind of realize, I think you have to
do both, if you want to be an entrepreneur. So, any other questions? Yes.
Over here.

Questioner: [inaudible 48:29]

Ryan Carson: Yes, so the businesses that failed, the question is, was there
anyone else, business partners, etc.? There’s basically just poor Jill, my
wife. In Amigo, there were sort of other people. Lisa was helping out a
little bit. Because we asked her to do too many things at once, there
weren’t a lot of people losing jobs and things. If anything ever happened,
Treehouse would be hell because we have 55 families relying on us not
screwing up. So, that’s very different but . . .

Questioner: So Treehouse now, are they like business development area? Are
there people that aren’t involved inn the [inaudible 49:03]

Ryan Carson: Yes. So, in Treehouse are there people who are not involved in
the product? Yes. Tons of them. So, we have . . . The team is laid out. We
have sales. So, people who love sales, they’re like animals. They’re
awesome. They’re like [makes roaring sound]. So, I love the sales team.
They’re awesome. We have User Growth. So those are people who are just
focusing on marketing. Then we have Product which are web designers and
developers and then underneath Product we have Community Management (a
phase we’re doing with) another person and then Support and then we have
Finance. So, there’s a lot of people outside that, but that’s just
inevitable. As you get bigger and bigger, you want your team to grow like
that. So, I think I was lucky that my failures were small and they didn’t
affect many people besides myself. Yes. Lisa?

Lisa: You mentioned Jill a lot and I wondered how much do you think your
success, how instrumental has Jill been [inaudible 50:00]? Sorry.

Ryan Carson: You put her up to that. Didn’t you?

No, honestly, if Jill wasn’t here, I would say the same thing, Jill has
been a huge, huge part of my success. The reason why is because it means I
have stability and someone I can truly rely on. So, I’ve never had a co-
founder. So it’s quite weird that I don’t have co-founders. I’m a sole CEO
and founder, which is super lonely and hard, and I wouldn’t really
recommend it but I’ve only been able to do that because of Jill. So,
whether you have an amazing wife or partner, or not, you will totally need
someone that you can be absolutely transparent with.

There were times when I remember . . . I had a talk with our financial
controller once about our cash flow and I almost threw up. This was when we
were doing our events company and we were sitting there and I said, “Let’s
go over the cash flow again. I don’t feel good about it.” He looked through
the numbers and basically we were fucked. I mean we were going out of
business and I almost threw up. So, I had to go to the bathroom and come
back and say, “Okay. All right. Thank you.” I couldn’t show that to
anybody. Then, I went home with Jill and freaked out. Then she freaked out
and . . . It was bad but I had to tell somebody, because I was going to
explode. So, you have to have someone who you can have the bad
conversations with and Jill’s been my rock. This is no relation at all to
what I’m talking about.

Life’s Details

I think a lot of us are curious about people’s details in their life and no
one seems to talk about it. Like, what you do during the day and how does
it work and what is the minutia of your life like? So, I thought I’d
quickly go through my daily schedule just because maybe it will be of
interest to you about how I run my life.

So, I wake up at 4:54 a.m. I’ve always been a morning person. So, I love
mornings. I just think they’re amazing. It’s quiet and crisp and cool and I
just love it. I think it’s amazing. I wake up at a weird time because it
allows me to kind of wake up and get out of bed and be going by 5:00. So,
I’m going by 5:00 and what I do is I go downstairs and I have a snack. I
had this big health epiphany where I changed what I eat and how I do
everything and part of that is eating the first thing when you get out of
bed so your body starts its metabolism. So, I have some nuts or some cold
meat, but at that moment, I concentrate quite hard at not getting into work
mode. So, I don’t pull out my iPhone and start checking things. I just try
to live for a couple of minutes, like that feeling of . . . I get up early
for me. No one makes me get up early. Thankfully, we’re okay financially
because . . . stuff and it’s not as if I’m killing myself to make more
money, or to do things. It’s about, I wake up early because I want to have
some time, some quiet time.

So, I focus on just being for little bit, especially because we have kids.
I’m sure you guys who have kids. Like there’s no mental space, once your
kids wake up. Right? [Makes yelling sound.] Which is great, but it’s kind
of maddening at the same time. So, I try to just sort of think for a couple
of minutes. So, after about 10 minutes of . . . And sometimes I’ll make a
coffee.

Then, after 10 minutes, I’ll sit down in front of my iMac and I’ll
basically, for 20 minutes, go through Trello. So, I don’t check e-mail
first and I think that’s key. So, I look in Trello and I sort of evaluate
things that are personal to me. So, I have a big list of people who are
important to me, Jill, Devon, Jackson, my boys, my mom, my dad and my
sisters, close friends, and I look through that list and I just sort of
look who has birthdays coming up or anniversaries or things that are
important for people who I haven’t talked to in a while. Then, I filter
some of that onto “This Week”. So, I try to be purposeful about people I
love and that are important to me and I do that first. So, that filters
onto a list called “This Week”.

So, I do that and then I try to think big-picture about other stuff, what’s
happening in my life. Is there anything I want to put on my list this week
that’s important? I try to do that before I check e-mail because e-mail is
this way that things just start happening. Right? Or, Twitter, etc. So, I’m
purposeful about things I put on my list for the week. That usually takes
me about 20 minutes or so.

Then, what I’ll do, is I’ll look at our roadmap. As the CEO of the company,
it’s my job to make sure that this big ship is going in the right
direction. So, other people don’t have time to think about the long-term
because they’ve got a lot to do. So, it’s my job to see icebergs coming or
opportunities and steer the ship in the right way and that takes time. So,
I tend to sort of think . . . I look at the roadmap in TeamGantt and figure
out, are we doing the right stuff? Is there anything I don’t see? Are we
spending too much time in this? Are we behind on that? Then, I’ll filter
that stuff into various to-do’s. I’ll delegate things, etc. That’s from
about 5:30 to 7:00.

I’ll probably do some e-mail in there, clear e-mail up a little bit. I try
to get my inbox under control and what that means is I don’t respond to
everything. I just kind of file stuff. So, I’ll quickly go through things
that I do need to respond to but not now. I will star them in Gmail and
then I will archive them. Then, things that I need to respond to I just
leave in my inbox and other things I delete or archive. That way, things in
my inbox I need to respond to, I’ll get to them but things that are not
really vital, I’ll just star them and archive them and then when I’m on the
train or something or I have time, then I’ll go to my star e-mails and then
I’ll work through those. So, I think that’s a big key to making a four-day
workweek work for you; you have to not let other people and their e-mails
determine what you do because you just won’t have time.

Then, the kids tend to wake up about 7:00. So, what I do is I make some
coffees, I take it up to Jill and we have coffee in bed, basically from
7:00 to 7:30 and the kids run around and play. It’s a really nice time just
to kind of be. So, it’s not always like that. Sometimes we’ll have to . . .
Something’s happening or if the kids are beating each other or something,
we have to get out of bed.

Then, 7:30 to 9:00, we basically get ready and have breakfast, take
showers, feed the kids, etc. But, I work at home and that’s the wonderful
thing about this. I don’t have any commute. So, I just go, “I’m going to
work guys,” and then I go into the next room. So, that really works well.
Well, I’ll hurry through the rest of this.

Then, basically, the rest of the day is work but the things that are
punctuated . . . There is . . . I go to the gym three days a week and it
takes a significant amount of time. It’s basically 9:30 to 11:00 and that’s
because I ride my bike there. So, I don’t get there right away. But I work
out for an hour. I try to have lunch and Jill will admit that I’m not that
good about having lunch with the family. I’ll sort of end up being rushed
because I have meetings to get through and stuff and I’d like to get better
at that.

Basically, more meetings, more stuff. Then, I finish right at 6:00, pretty
much every day. I feel I never work over 6:00. You agree? Okay. I just
wanted to check my reality. So, I finish at 6:00 every day. I’m really hard-
core about that. Then, basically, I turn off the computer and then run into
the room and go, “I’m done.” Then, the kids are there eating dinner and
looking cute and Jill’s like, “Take them off me.” So, I grab the kids and
then bathe them and then we take turns making dinner. Some nights I’ll do
it. She’ll put the kids down. Sometimes I’ll put the kids out and she’ll
make dinner. Then we basically hang out. Jill and I hang out and have
dinner from 7:00 p.m. to 10:00 p.m., roughly, watch TV or hang out and then
go to bed, roughly, at 10:00. So, that’s my rough schedule on Monday to
Thursday. So, any questions about sort of day-to-day minutia stuff?

How do I manage West Coast business? I don’t. We would only have one hour
overlap with them. Effectively, what that means is that my team in the US
has to do that. So, I have good guys on the East Coast who manage and we
have two people on the West Coast. So, it would be impossible if I had to.
I’d have to shift time. But, again, that’s how hard-core I am about it. I
could. I mean I could tell Jill, “I’ve got to work every night. I’m sorry.
The business is growing. It’s really stressful,” but I just say, “No. I
don’t. I don’t have to do it. No one has to do it.” And that’s kind of how
it stands.

Questioner: [inaudible 59:41]

Ryan Carson: Travel? I don’t travel too much. When I do, I’m gone for a
week. So, quarterly, I’m gone for a week and that’s kind of hard, but I
figure other guys travel a lot more than that. So, in the back, in the pink
shirt, I think.

Questioner: You alluded to the fact that you don’t massively need to work.
So, I’m wondering, at what point in your career that you kind of described,
when did that happen that you’re not desperate to work to make ends meet
and also how much of an impact does that have on your abilities to manage
your work-life balance?

Ryan Carson: So, I’m not financially independent, just so you know.

I can’t sit around and not work but I don’t need to make as much money as I
used to. Right? So, I think that probably happened when Jill and I just had
enough savings that if the shit hits the fan, I’ve got plenty of runway to
figure it out. So, that’s what that was about. So, what you’ve got to do is
figure out your monthly expenses and how much runway you want and then once
you have that in the bank, you can start to kind of take a step back from
the “I’ve got to make more money this month” mentality. I was like that a
lot. I remember when we hit £10,000, in the bank, total for the entire
company and we are bringing in £1000 a month and our costs were 908. It was
like, “Oh my gosh. This is really stressful.”

Probably once we hit that point, it was more that . . . What I realized is
I had a choice about where I focused my efforts. I am ridiculously
passionate about Treehouse. Like I said, I could die doing Treehouse,
knowing that it matters that much. So, I’m thankful I can do that and get
paid to do that as well. But, did it have an effect on what my daily life .
. . Not at all. I have to say, I wrote a blog post about it about how
selling your company doesn’t make you happy and the general consensus there
is that you basically wake up the next day . . . And we can make tons of
money or anything like that but the point is that you wake up the next day
and you’re totally the same person. I woke up at 4:54 the next day, went
downstairs, and I realized I was the same guy and I just wanted to keep
doing stuff. So, it actually didn’t change anything, really, and that’s the
key, realizing there isn’t some big payoff somewhere. If you’re building a
business, it’s not going to end, ever. It’s more about doing stuff now that
you feel happy about. That’s been a big sort of revelation to me.

In the checked shirt. Yes.

So, the question is could I have taken all these risks and done all these
things if I had kids? And, man, it would be hard. And the problem is I
can’t answer that question because I didn’t do it. So, I think people who
start businesses with kids are brave but you can take calculated risks. Get
enough savings in the bank and if you fail, you know that you can recover.
So, it’s probably six months of savings, I would say, would be safe. Just
take your core expenses, your mortgage, your grocery costs, your etc., your
fuel costs etc., and then if you save it up, you know that you could
survive but, yes, it would be hard.

Who cares about venture capital and knowing more about it? Raise your hand?
Nobody. All right. I don’t think we’ll talk about that. If you want to know
more about venture capital, basically, I’ll go through this in like 30
seconds. Read a book called “Be Smarter Than a Lawyer and Venture
Capitalists”. That will tell you everything you need to know. Understand
the numbers. Do not raise money unless you understand what the terms sheet
is saying. You can get really badly screwed if you don’t do that. Get
profitable first before you raise money. It will help you to raise money at
a much higher valuation. That’s what we do at Treehouse.

Don’t take money from just anybody. A lot of people have money now that
they want to invest but do not take money unless that person can offer you
more than money. Also, get one ambassador to be your first investor. What I
mean by that is Kevin Rose, who started Digg and all that stuff, he was our
first investor and he basically got a group of investors to participate
with him. So, he got people like Reid Hoffman from LinkedIn and David Sze
from Greylock, and Chamath Palihapitiya from Social+Capital, to all invest.
I didn’t know any of them. I didn’t have any connections with them but he
arranged that. So, get one good investor that can help you pool a group of
investors.

In the right instances raising money is absolutely the right thing to do.
So, I’m really glad we raised money for Treehouse now because it’s allowing
us to execute a big mission. So, I’m thankful we’re doing that. So, let’s
move on.

Questioner: [inaudible 01:04:44]

Ryan Carson: Oh Lisa asked a question. What? You’re not allowed. So the
question is: If we’re not going to sell Treehouse, how are people who
invest $5 million going to make their money back? The answer is
secondmarket.com. So if we get to a point where they want to exit the
business then they basically can sell their shares privately. So, that’s
the key. We also are probably going to offer that to our employees who have
stock, as well, as a way to get liquid.

So, yes. I don’t ever want to IPO. I think that’s very hard to maintain to
control a business after it goes public. So, I’m not going to do that. I
just thought the shirt was awesome.

KPI’s

So, the next thing I want to talk about is something called dashboards. So
any of you working in a company or who own a company you have key metrics
that you need to understand about your company. I want to talk a little bit
about the importance of that and how we’re doing that a Treehouse. So, what
tends to happen with any company is that you start and it’s just you and
you know everything. You know what’s good and bad and why you’re
succeeding. Then, you start to grow and things start to get little crazy
and you hire more people. Then, what you realize is that not everybody
knows what they’re actually being measured to do and not everybody knows
what’s actually happening in the company. “Are we getting more hits at the
website?” “I don’t know.” “Are we getting more sign-ups?” “I don’t know.”
“Are we more profitable?” “Are we getting more tweets about us?” “Are we
selling more products?” In the end, you realize actually you don’t know a
lot of these key things about your business.

So, the first thing I’d recommend every business do, whether you own it or
you’re working in it, is decide what your key performance indicators are
so, your KPIs. All they are is the metrics that matter. If you had to
distill your business down to numbers, what numbers determine whether
you’re succeeding or failing? Figure out what those are. That’s the first
step you should take in a business anyway. It’s easy to look at things like
revenue and just say, “Oh, the revenues going up or the revenues going
down,” and think that somehow that’s an indicator of whether your business
is succeeding and it’s usually not. I mean, it is, a little bit.

So, decide on your KPIs and then who’s responsible for them. So, at
Treehouse, we have all these teams we talked about, Sales, User Growth,
Product, etc. So, we had to figure out which team is responsible for which
KPIs. It’s quite hard to figure out at first. Is the Product team
responsible for increasing lifetime value of customers, or is the User
Growth team responsible for that, or is it the Community Management team?
You have to figure out all these numbers because you have crossover between
departments. So, really, what I’d recommend is sitting down and talking
about it, who’s responsible for what.

What we didn’t do was come down from on high and say, “These are your KPIs.
You shall do them,” because it feels a bit like the 10 Commandments . . .
right? . . . coming down from on high. So, I said, “I think these are what
determines whether a business is successful or not.” Then, I got our team
leaders together and said, “Do you guys agree that these are good KPIs, and
if so, what should they be? How many members should the User Growth team be
responsible to get each month? How many unique hits on a site should we be
getting per month?” I basically let them set all the KPIs. That’s just a
good way to get people to agree and make sure that they don’t feel like
they have totally undoable goals.

Then, the next thing is make sure you build a tool that records all these
KPIs automatically. So, the trouble is that in the beginning, you’ll sort
of be stressed and you’ll be running around and you be building products
and you’ll forget, you’ll need to be having, ideally, the database
measuring these things automatically for you. If you don’t have a tech
business, that’s obviously not possible. Say that you’re in accounting, you
can obviously measure some core stats and have the financial controller
record key stats and say, “How much revenue are we doing per week?” Put it
in the Google Doc and make sure that it’s recordable. The point is to have
all the data. So, you’ve got to have the data and you have to record the
data from the beginning.

So, the problem with Treehouse is that we’re only now . . . Like we’ve been
recording this data for a while but we didn’t from the beginning and I wish
that in the beginning I would’ve said, “These are the important things that
we need to be measuring these things automatically, so that at least we
have the data so that we can look back on it.” We’re doing that now but I
wish I would’ve done that in the beginning.

Ideally, you’d want that to be automated. You don’t want people to be
involved in recording the stats because, what happens is, people get busy.
So, automate that as much as you can. If you can’t, then make sure you hold
people accountable to record that data, even if you’re small. Even if your
business is just you, try to start measuring the key data that matters,
even if it’s just in a Google spreadsheet and every day you put a number in
a cell. It’s going to be super helpful to you long-term.

Then, you want to build a simple dashboard. So, the dashboard, basically,
for us, is a website. The idea is that it’s a tool that shows you very
simply, if you have this KPI, you want to get 1000 new customers per month
is it red or green? So, if it’s 1001, it’s green. If it’s 999, it’s red. It
just gives you this quick visual indication of: Are we good or bad on this?
Really, if it’s green, you celebrate and if it’s red, you dig in and figure
out, “Okay. What’s going on?” So, it’s meant to be high level. So, if
you’re not getting enough unique visits to your website, you could start
asking questions like, “Why are we not getting uniques? Okay. Let’s go into
Google Analytics and figure it out,” Because a thing you realize, as your
business grows, is that you don’t have time to care about everything all
the time. You only have time to care about what matters, and to be honest,
when it’s going wrong. So, that’s when you dig in and sort of figure out
what’s going on and why. Then, the last thing, with dashboards, is that you
need to hold people accountable to them. So, if you create a dashboard and
no one ever looks at it, and you never talk about it, then it won’t work.

So, what we’re going to do with Treehouse is, in my weekly video update,
I’m going to talk about the dashboard and just say, “Hey, this is good.
This is bad,” and the message to the whole company is that this matters and
I look at it and we all look at it so, let’s care about it, so it’s
something that gets measured and gets talked about. So, that’s dashboards.

Questioner: Given the size of the business you have now, and the different
experiences of business size you had before, if you had a blank sheet of
paper, what would be your ideal size in terms of people?

Ryan Carson: I presume that you could execute the business at any size.

Questioner: Yes. There’s some sort of linearity to it being successful.

Ryan Carson: Excuse me. Gosh. That’s a good question. I feel like we
reached the point when I started to have to create a lot of processes and
things. I think it was around 40 people when I started to feel out of
control. I was like, “Oh my gosh. I have no idea what anyone’s doing.” “Why
don’t I know what’s going on?” So, I think under 40 people, but at the same
time, I think is quite exciting that we’re at 60 people. It seems like . .
. Yes. So, I would say 40 people seem to be some sort of threshold, but
actually, personally, I’m having fun still at 60. So, I imagine I’ll hit a
threshold when I’m like, “Whoa. This is bigger than I want to be involved
in. So, maybe I need to be chairman and have a CEO run it for me,” or
something like that. Yes. That’s a good question.

But, enjoy the bits when your company is smaller and talk to each other and
soak it up. Then, when you get bigger, enjoy the excitement around that and
your ability to perform more. But that’s a hard question.

Any other thoughts? Yes. Cool, so the question is, basically, what does the
company org chart look like? So, it’s fairly flat. We have three levels.
So, there’s me and I have, underneath it, team leaders and team leaders are
. . . I did actually send an e-mail to everybody and said, “I’m getting rid
of any titles anybody has.” So, there’s a couple like “Sales VP” and “Chief
Product Officer” and we just got rid of all that. The idea is you basically
are either me or . . . I haven’t decided what to call myself but . . .
Then, there’s team leaders and those people manage teams and those people,
at the moment, are the third level and eventually we’ll have some teams.
So, I’m hoping that we’ll only stay, have to get that deep. I’m sure that
if we get over 200 people, we’ll have to add more levels but . . .

And the idea of saying, “You’re team leader versus you’re VP of this,” or
whatever that is, I think it’s just more kind of human. And I think at the
moment those people can manage, at the most, sort of 15 people each but I
think they’re starting to break a little bit. So, I think we’ll have to
figure out what to do about that.

Questioner: [inaudible 1:14:28]

Ryan Carson: Cool. So how does career and salary progression work?

Questioner: Yes. [inaudible 1:14:32]

Ryan Carson: We do a system . . . It’s actually . . . We’re going to have
to revise it. So, we started out with this really interesting . . . I
thought it was . . . cool idea. It was called “Level up”. And leveling up
was, every quarter you would have a review and that review, if you had
completed the side project that you had agreed to do, it would be
measurable. So, if you’re a developer, we’d say, “Your project is to build
an open-source tool.” It’s something that you come up with together.

So, they’re excited to say, “Hey, I built an open source tool that uses no
[JS].” We’d say, “Okay, well, how does that help the business?” Then we
find out how it helps the business. Then, you’d agree on it and then they
build it in three months and at the end, you can tell whether they did it
and, if they did it, they get a set salary increase. So, you say, “Okay.
Good job. You did it so now you get the agreed salary increase of X.” So,
the point was that you could increase your salary exactly, be in control of
your salary increases, and know how much you can increase it by, and where
you are going to get to. So, every job role had a salary range from X to Y
and you knew where you were in that and you knew what the top was but that
system has since broke.

The reason why is, what I realized, is that people . . . It’s unfair to ask
people to do jobs, like a project outside of the day-to-day work because
they end up doing it nights and weekends and it just doesn’t work. So,
we’re basically abandoning the level up system and now it’s going to be
back to just, “Hey, are you doing an awesome job? If so, you get a salary
increase,” and the only way to become a team leader, if you’re on the team,
if number one, that position is open, and number two, you’re good at it.

So, there isn’t much of a ladder to climb. So, we really hire people with
the expectation that you’re going to be doing your job forever. There is
maybe the possibility that you become a team leader but there isn’t a lot
of room to go up the ladder. There may be room to go sideways or diagonal
because we always promote jobs internally. So, we’ll say, “Hey, guys, we’re
hiring another teacher,” or, “Were hiring somebody on User Growth,” and
then anybody can apply for that. Occasionally, we have a couple of people
apply for stuff and sometimes I’ll tap people. Like, I knew we had a
community manager position going so I just talked to Faye and I was like,
“I think you’d be good at this. Are you interested?” So, there’s this kind
of side progression. But, yes, we don’t have a lot of corporate ladder to
climb, really. But this is something I’m trying to figure out. How do you
help people advance their salaries and get more money in a way that’s good,
that’s not full of angst and frustration. I just want to remove all that
but it’s very, very hard.

We’ve had to do salary resets with people. Like, what we realize is we had
people at a certain level and they were way below like new people we were
bringing on, which means they were paid too little. We haven’t brought
anybody down. I don’t think that would go over too well. But, yes, we’ve
done a lot of salary resetting with people. So, that’s hard. If anybody
knows about this, like, why don’t you speak up. Like what’s a good way to
have creative progression happen? But, meanwhile, think about that.

Questioner: Do you encourage side projects, designers and developers doing
their own thing or not? Would you rather they focused on [just a] few?

Ryan Carson: We still use the level up system with designers and developers
because, actually, it works quite well. They do it anyway. What I found was
that all of our developers are building open source stuff whether they get
paid or not. So, they might as well do that as a project and feel good
about it and get a salary increase because of that. So, the person who
manages product, his name is Alan. He’s decided his team loves level up
projects and they work. So, we decided to keep it for them but for almost
everybody else in the company, it just doesn’t work to do these kind of
projects.

So, do you have a question?

Questioner: I have two questions. The first one is: Have you heard of Y
Combinator.

Ryan Carson: Have I heard of Y Combinator? Yes.

Questioner: Is there like an equivalent in the European side?

Ryan Carson: Yes. There’s one called Seedcamp.

Questioner: Seedcamp.

Ryan Carson: Yes. It’s called Seedcamp.

Questioner: Is this in England?

Ryan Carson: Yes. It’s in London.

So, is there an equivalent to Y Combinator? Yes. It’s called Seedcamp and
it’s really good. Yes. And I’d recommend . . . If anyone wants
recommendations, the guy, I know him and they’re great. So, just e-mail me.

Questioner: Cool. Thanks. And my second question has to do with your
failures, failure for Flight . . .

Ryan Carson: It’s plural. There’s lots of them.

Questioner: Failures. For FlightDeck, the first version, how long did you
wait before you decided to just give up? Like I know you went into the
kitchen and you said, “It’s done,” but was it just an epiphany or did you
set targets? When did you know that it wasn’t going to work?

Ryan Carson: It was just a gut feeling. It was just like, “Wow. This
business is not growing and apparently I don’t have what it takes.” It was
a gut instinct that this was not going to work and I’m not prepared to do
what it would take to make it work, which is try to raise money or take on
debt. I just thought, “yes.” It was a deep-down like did I care enough
about this business to keep fighting? And the answer was “No.” So, yes.

Questioner: Okay. Thanks.

Ryan Carson: Cool. So the question was: Before I started getting fit . . .
How important was getting fit to having this sort of success or whatever
and am I less tired now? I went from 24% body fat to 14. I did that over
about eight months and I did that when I was 34, the age I am now. So,
pretty much everything I’ve ever talked about happened before that. So,
apparently being fit has no relation to failing and succeeding, but I can
tell you, I’m happier, man, totally happier. It’s weird. I look back and I
think, “Oh my gosh. Why did I wait until I was 34? What a waste.” Because
for some reason I just feel more content. I just feel kind of happy with
who I am. So, that must be worth a lot because now I kind of feel like that
was the last puzzle I couldn’t crack. I had had a good time in business and
had fun with it. I have wonderful friends and an amazing family and all
these things but I was unhappy with my physicality. So, as soon as I
cracked that, it was like, “[Guys this is] is good.” And I hate exercise.
Man, I just hate pain. So, I was able to get through that and then once I
did, I started to feel better. And I do have, I think, more energy now.

What I did is . . . I had tried various things, ridiculous things like, “If
I don’t go to the gym, I’m going to burn a £20 note to prove that . . . ”
don’t do it and that didn’t work. I burned like £20 note and I was like,
“Well, I’m never doing that again.” What I ended up doing, and Jill knows
that this is my demon for a long time, I couldn’t go to the gym and stay
consistent. So, what I did is not commercial and I have no . . . I don’t
have anything invested in this company at all but I use a company called
Team Breakthrough here in Bath and I saw an ad in a magazine that showed a
guy who was not looking great and then he looked great and I’m like, “I
want to be that guy.”

So I just called him and I was like, “How does this work?” and basically
went there and I sold a couple of my things and got some cash together and
I took that cash in a brown envelope every time to the gym, and every time
afterwards I gave him cash and it was kind of that mental thing of like,
“This is real money. I might as well work hard while I’m here because I’m
going to have to give them money at the end.” I saw results right away.
Like, within two weeks, I lost 2% body fat but that was mostly because of
what I was eating. So, I stopped eating carbs and milk and stopped drinking
fruit juice and stuff like that, and saw immediate results and after that
it was a lot easier. I was like, “Hey, I can do this.” Then, from there it
went on. Now, I actually like working out. At the end, I feel really good
about it. So, I highly recommend it.

Yes.

Questioner: How much do you think can be taught, I suppose, and how much
have you taught yourself or listened to other people and brought skills in
as that . . . balance that?

Ryan Carson: So, the question is kind of like: How much have I absorbed
from other people versus how much have I kind of learned myself? I used to
be this big self-help book guy. Jill would always give me shit because I’d
buy books about, “10 Steps to Be More Effective in Business” and stuff like
that because I was kind of in this thought like, “I can learn a lot from
these people,” but the penny finally dropped when I realized, “I’m still
reading these books,” so I’ve got to stop and just do. So, I think at some
point I realized, “I think I know what I need to know.” All of you guys
know what you need to know. There’s like bits and stuff you can pick up
from talks like this but most of what . . . You got everything you need,
really, to get started.

So, I think there can be a trap in trying to trying to optimize your
“Getting Things Done” system for your whatever, but the truth is now I
realize most of it is just kind of getting started and figuring it out. We
had never raised venture capital before and I kind of figured it out. I did
read a book about that but that’s because there’s facts I needed to know.
So, I’d recommend, if you find yourself always reading about it and never
quite doing it, then you just need to stop reading about it.

I actually unfollowed a couple of people that I really admired on Twitter
and I was reading their blogs and I realized I need to stop reading these
people and I just need to do my own thing and I need to stop trying to be
them and just be whatever it is I’m going to be.

Yes. Up there.

Questioner: Yes. [inaudible 1:25:02] mentor [inaudible 1:25:04].

Ryan Carson: That guy’s like, “No.”

I actually asked Gregg to help mentor me for a while and that was really
good because I was in a coffee shop and I thought, “Hey, you know who knows
a lot about a lot of stuff is the CEO of Future.” So, Greg was the CEO of
Future at the time and I just grabbed him and said, “Hey, I bet you know
stuff. Will you have coffee with me?” and I learned a lot through that. So,
Greg was a key part of that and then the rest of it is probably just
reading blogs. There’s something called “EO”. I think it stands for . . .
What does it stand for? Executive Organization or something? Entrepreneur’s
Organization? Yes. It’s just a place where you can become a member of and
talk to other founders and stuff at the budget problems and your questions.
So, I’d recommend doing that. If you can, find like-minded people and talk
to them. There is a real catharsis with that.

Well, this was amazing and I do thank Greg so much for inviting me and
thank you for putting on Creative Bath.

It’s an honor to be up here. Like I said, you guys know as much as I do.
So, I appreciate your coming out and thank you to any of you who are
Treehouse members. I love you guys. But I’m around and you can always e-
mail me as well. Just Ryan@RyanCarson.com or Ryan@teamtreehouse.com. I’d
love to hear from you but thanks again for coming and I will see you soon,
Thanks.

Treehouse

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