Show Notes

It’s always good for startups of all stages to have goals and be working every day in pursuit of those goals. However, too many startups lose sight of those goals and the practices that can help get them there. That’s the precise problem that founder and CEO Matt Tucker is looking to address with his startup Koan, an alignment platform that’s heavily inspired by OKRs.

In the latest edition of the Silicon Valley Momentum Podcast, Roland Siebelink spoke with Matt. The two discussed a wide array of topics related to Koan and the qualities that put startups in a position to be successful:

• How Koan is solving a “structured collaboration problem” by helping teams work together and work transparently to create a common purpose across the entire company.
• Why several small but positive behaviors can end up making a significant difference in the end.
• The importance of startup leaders “doing the basics,” even when a business is in its infancy.
• How a combination of coaching and software can be the right combination for creating lasting change within a startup.
• Why leaders need to take into account the problem they’re solving and how quickly they need to scale when it comes to fundraising.

Transcript

Roland Siebelink: Hello and welcome to the Silicon Valley Momentum Podcast. My name is Roland Siebelink, and I'm a Scaleup-ally for tech founders. And I'm so excited today because with us is Matt Tucker of Koan. Hello, Matt.

Matt Tucker: Thanks so much Roland for having me.

Roland Siebelink: Absolutely. I'm so delighted to have you on because Koan is a performance platform, really focused, as I understand it on OKRs. There's so much to talk about OKRs in the startup world. Did I have that, right?

Matt Tucker: Yeah, you did. I'm looking forward to the chat. We think about the problem that we're solving more broadly, as this problem of alignment. Down to the individual team, how do we work more transparently together? How do we know what's happening? How do we define the outcomes that we want to achieve? Whether that's through OKR or another methodology. And then how do you scale that up? How do you get teams to work together? How do you create common purpose across the entire company? And this is a set of things that have been stuck in very manual processes for a long time. And we're trying to finally bring the advantage that software can to helping every team do these behaviors better.

Roland Siebelink: I'll definitely want to delve into that quite deeply because the startups I work with, implementing OKRs and/or other performance systems is often a core part of what we do and a source of a lot of insecurity with startup leaders, I would say. But before we delve into that, Matt, can you tell me a little bit about your history? You have a good history in the startup world already, you were saying, right?

Matt Tucker: I graduated with a computer science degree way back in 2000. And almost immediately, in the middle of the dot-com boom, I did first start up, which was Jive software. We bootstrapped Jive for actually six years before doing our Series A fundraising. And Jive, if you're not familiar, was an early pioneer in collaboration software and in the right place at the right time. Facebook was happening, and Twitter, and MySpace. And our mission at Jive became, let's take all that innovation that is changing our consumer lives and apply it to some really interesting business use cases. You had the crazy up and to the right for many years. Series A and B and C. We IPOed in 2011. And we'll get into it. There were some harder years for Jive as well. But then finally decided it was time to do the next startup. And I got really fired up about the problem that we're tackling at Koan, which I consider a structured collaboration problem. And so we've been at it at Koan for the past few years.

Roland Siebelink: That's awesome. Before we go into Koan, many people who've had that huge startup success who made it, if you will, who've established themselves in Silicon Valley would rather become an investor or become their own VC or join a VC firm. Is that something that you can shed some light on? What was your decision process in this evolution in moving out of Jive and looking for your next thing?

Matt Tucker: A great question. I think in all of our own careers, we have to look for what are our own dopamine triggers and what makes us happy, what gets us fired up and excited to wake up in the morning and work on new things. And there's probably many moments in each of our careers where we have a little bit of an existential crisis, like, "What do I wanna do?" Especially if I have a lot of options about what that can be and we're lucky enough to be in that position. And it just became very clear to me. I love building stuff. And there are great things about the early stage of a company and in the middle and later stage. But just got excited about the idea of going and doing it all again. Building something from the ground up, and that aligns much better with my own dopamine triggers versus what was also an amazing thing, helping other startups, investing. I can understand the allure there, but building things is what I love doing.

Roland Siebelink: Let's go into the details of Koan a little bit more. You just called it a structured collaboration more so I think than in your experience with Jive, right? Can you delve into that a little bit? What is the evolution from just general enterprise communication toward a more structured collaboration working toward alignment, as you said.

Matt Tucker: Yeah. Taking this problem of alignment. Generally speaking, as a strategic and operational cadence that you want to get set up in every company, whether you're a tiny startup or you're trying to scale really quickly, or you're a large enterprise. And that cadence has some aspects that are multi-year. How do we write down our mission and our vision and be clear about our values and define the strategy? And ideally, at least a year, if not a multi-year strategy. And then that cadence starts working down into "All right, how do we set goals every quarter?" We define the outcomes that we want to achieve. Even more than that: "How do we put together the plan?" What are we going to achieve this month toward our goals? And then even down to the, "Well, what happened this week?" Let's reflect on it. What did we achieve? Did we do as much as we wanted to? What should our priorities be? And then even down to every day. What am I working on? Where am I blocked? And where do I need help? And I think it turns out if you think about that cadence and you build some great behaviors around how to do all of those things and don't just leave it up to chance, you have a much better chance at success as a team and as a company. And I call it a structured collaboration problem in the sense of there's an actual rhythm around it. And there's some real processes you need to be thoughtful about how you do each of it. Whether you use a software tool like Koan or you're trying to do it totally manually. And it's not just, "Hey, we're chatting in Slack and I posted a message.” It's, "Oh, we've decided how to synchronize as a team of humans." There's a drum beat and the drum beat is how we're running our team or our company. And that is an incredibly important problem to think about all the way down to the daily cadence. And then up through the "Why are we even here?" And how are we thinking about the problems we're trying to solve on a multi-year basis?

Roland Siebelink: I love that you really positioned this as ultimately a methodology of practice. You even said, whether you use software such as Koan or you do everything manually is almost a secondary question. It's a contrast with how I see startups try to decide the tool first and then almost think of the processes and the habits as an afterthought. Is that a problem that really plagues this space, would you say?

Matt Tucker: I think you're right to point that out. If you are lucky enough to start with the tool and then accidentally figure out that the cadence and the practices, maybe you can get lucky. But you're right. The thing that actually matters is having those positive habits. One of the foundational philosophies of Koan as a company is our belief that small, positive behaviors, if done repeatedly, lead to massive results. And this is something that great athletes know well. If you chat with an Olympian, for example, and they're generally not really focused on, "I have to think so much and so hard about what I'm going to do when I'm trying to win the gold medal on the race day." And what they're really focused on is, "What's the practice that I know that I need to put in every single day." And if I do those behaviors, if I put in the time, if I'm thoughtful about that cadence and those behaviors, then everything's going to happen and it's going to add up to the big impact that I want. I think you're completely right. It should be about the behaviors. It should be about those rituals, not about the tool. On the other hand, our hope and our belief is that if you have the right tool, it can make the behaviors much simpler. And there is this important moment, and typically quarterly for a lot of companies, where you come together, you do this planning exercise, you agree on what the big strategic things you want to achieve are. But that's not it. There was this really bad problem, which is you set the goals and then nobody talks about them again until the next quarter.

Roland Siebelink: It's too painful to do so, right?

Matt Tucker: Yeah. You just don't achieve them. It may sound, I don't know if it sounds crazy, I hope it doesn't, but you should be chatting about your goals every single week. And they're not that many weeks in a quarter. Twelve, typically, somewhere around there. You should be making close to 8%-ish progress every week. If you think about how short of a period of time. This is not like, "Oh, we think about our goals once per month or even twice per quarter." There should actually be some tangible progress and conversation around what we're doing and what we can knock down over the next week as a team, every single week.

Roland Siebelink: We said already we want to delve a little bit into the best practices for OKRs and alignment in the company. But I'd like to start this discussion by pointing to your use of agile as an analogy. And I feel that sometimes both agile and OKR have taken on some aspects of what you might almost call a religion where people want to be the true believers and if they do it exactly right then salvation will come to them. Is that how you look at OKRs as well? Or is this more of a saying that people who haven't really gotten the experience with OKR so much?

Matt Tucker: You might call that a leading question. But as you might guess, my answer is no. We're not particularly religious about this. And maybe there's a danger with anything that you turn into an acronym. It just automatically turns into this heavy thing where people assume there's one and only one way to do the process. And ironically, you go read "Measure What Matters" by John Doerr or many of the other great resources out there about OKRs. And the real emphasis is this is meant to be lightweight. This is meant to create focus. And yet somehow, for every organization and team that's had an amazing experience with objectives and key results and where it's actually created more autonomy because we can focus not on micromanagement but on defining the impact we want to have and then letting people be creative about how they achieve it. For all the good stories, there's just as many bad stories like, "Oh my God, we came in, we did OKRs, we set all these goals. It just was this huge waste of time." And I think there's always that danger of any business process. I think you're right to point it out on agile. But one of the reasons we do love OKRs much like agile is at their core, in a part of the philosophy of this process is that it's meant to be lightweight. It's meant to be flexible. It's supposed to adapt to the culture of your team. And it's obvious, in a sense of, "Yeah, there are a set of principles that make sense for how you would set goals as a team." It's what OKRs is about. This isn't like some weird, extra fancy stuff. And same with agile. It's like, "Oh, that's kind of obvious." And once I read about this, we should be able to do these practices in a way that's better than the old waterfall way we're doing it. And so that's where we're always trying to find with OKRs. Keep it lightweight.

Roland Siebelink: Go back to the first principles rather than try to follow all the books and almost the Bibles these days to the letter. Listen more to the origins than to the priests, perhaps.

Matt Tucker: Yeah. And I think this is that this is a challenge. One of the things that we find with OKRs, in particular, is there has to be this journey where maybe we weren't writing down our goals at all before. And there was always some way that you're prioritizing the work that you're trying to achieve. You get really excited about the idea. You'd be going to implement it, you may have this assumption like, "Oh, we have to do almost a binary switch from the old way to the new way." And everything must be this new way of how we're working together.

Roland Siebelink: And then everything will be perfect, right?

Matt Tucker: Exactly. It's going to be perfect. All the messiness of our startup will go away and everyone will know exactly what to work on at every moment. And none of that's really true. And even as some of these ideas of how you find mastery eventually in a martial art, right? You learn all the movements and you do the disciplines. Practice again and again. And then eventually, when you build actual mastery, you get more creative with it and you figure out how to improvise. That's always what we help folks get to. And not to take it too seriously in the interim. Making sure that it's actually providing value.

Roland Siebelink: In the pre-conversation, you also mentioned that you've collected some, could I call them bad practices around OKRs that you're working on? Is that something that you want us to start sharing with our audience already?

Matt Tucker: : We have, unfortunately, we've seen it all. And in fact, we are in the midst of publishing what we call the anti-OKR pledge.

Roland Siebelink: That sounds fascinating. Tell me more.

Matt Tucker: I'll put "anti" in quotes. But there are a set of things that people tend to do again and again around OKRs that make it not the lightweight, focusing business practice but the heavy, really painful, "I'm doing way more work than the value I'm getting out." And so, we've collected it into a set of principles and we're launching it at okrpledge.com. Please go take the pledge and maybe share it inside of your team and your company if you're, unfortunately, working at an organization that is maybe not doing their goals process in the best of ways. And the idea is that it's a set of principles around, what does this look like when it's being done well? This is not just for executives and this is gotta be something that provides value all the way down to every individual. Set less, focus more. And there's this really bad practice of companies setting way too many goals. Plus, assuming that every part of the business needs goals. And that's just not the case. And I really liked the analogy of OKRs acting as a spotlight in your organization. In a sense of, "All right, we should set goals around the smallest number of things that we want to dramatically change." Everything else probably does not need OKRs. Manage that through business as usual health metrics, KPIs. Not everybody needs to be working on OKRs every quarter, for example. The less things you're focusing on, the more things you'll actually achieve. There's a few other principles in there. This idea of resisting cascading goals. Cascading is almost a bad word inside of Koan. We much prefer the idea of bottom-up alignment. And we're also huge fans of not doing individual OKRs. We encourage you to "just say no" to individual OKRs.

Roland Siebelink: Okay. Just team OKRs. But in every battle, right?

Matt Tucker: Exactly. Keep it a team sport. As soon as you're doing individual OKRs, that almost by its nature acts against the interest of, "Hey, this is actually just a small set of things we're focusing on." It almost always means you have way too heavy of a process and get away from the spirit of stretch goals and put people into fear-brain around, "This is how I'm getting evaluated," or getting my promotion or getting my bonus and all those things act against the better outcomes you can achieve out of a OKRs process.

Roland Siebelink: What I've noticed in the performance management slash alignment slash OKR space is that we do have a lot of software companies. And then very often you'll see them build a sizable professional services operation to help companies implement the software to provide coaches, to provide customer success in a broad way. What's your philosophy about that in a relatively complicated space for startups, such as performance management? Is the application/software of the advice/coaching that provides the value? Do you need to have both or can you outsource some of it? What's your feel about that?

Matt Tucker: Great question. By the way, I'm a huge fan of executive coaches for every executive, especially if you're a CEO. If you don't have an executive coach, you should go find one. It's going to lead to a much better result for both you and your career, as well as for your company, whether you're a startup or later stage. And our perspective is this is not a problem that can be purely solved by software. This is also a problem that can not purely be solved through consulting. This is, I think, part of where things have gone wrong. And there's been many, many years of management consulting, it has led to a big impact. It's necessary. People need help figuring out how to do this stuff. But the part that's been missing is lasting behavioral change. I've been through enough of these in various past iterations. We'd have a consultant come in; they'd be extremely helpful. Felt like I learned a whole bunch of stuff. And then we'd go back to the day job and forget it all almost immediately. This is where we think software plus expertise can actually lead to the most profound impact, which is the expertise, the coaching, the consulting, that provides the context, it provides the overall methodology and, some awareness of what we're doing. And then the software is there to help you do that, the practice and the positive behavior, the habits. Our philosophy at Koan is, we're trying to be the software piece. We care a lot about these topics. We do lots of blogging and try to participate in podcasts like this. But our whole model is we're going to go partner with all the experts out there like yourself. That's what we're trying to do. And so we don't have a professional services arm at Koan. It's not that that's a terrible model. It's just, we think we can have a better impact by focusing on the part that we really want to be the best in the world at, which is the software part of this.

Roland Siebelink: Can you tell us a little bit where are you at with Koan at the moment? How big is your team? How fast are you growing? And what's next?

Matt Tucker: Yeah. We're a seed-stage company. We've been at this a couple of years. I have some amazing investors. One of the reasons, frankly, that OKRs are important to us, and even though we're not religious about them, there are other great goals, frameworks. One of the really interesting things happening out there is there is a big movement to embrace this methodology as part of how you run a company well. That's part of what's been leading to a pretty huge amount of growth for Koan and what we think is becoming a bit of eventually a category around alignment. It's not going to be all about OKRs. That is not a thing all by itself. But it's part of the story about how you create a great operational and strategic cadence. We think that there should be purpose-built software for this. It's different from task management. It's very different than HR performance management. There has to be something that connects different work streams together so that inside of a team you work better together. And then how do teams of teams know what one another are working on and become more outcome focused? It's our belief that over time, this is going to become a lasting software category. That's what we're trying to build towards. OKRs are a big component of that, especially right now. And for all the organizations out there trying to figure out, "All right, well, how do we do goals better?" Now that we're remote, we need to be more outcome-focused and not try to micromanage people but figure out how to do these positive behaviors. For all those organizations out there trying to figure out how to adopt some of these methodologies in a lightweight way, in an employee-friendly way, we hope you will check out Koan. Plus, go and sign up for the OKR pledge at okrpledge.com.

Roland Siebelink: Okay. For everyone who is interested in adopting or improving their OKR methodology, their alignment methods, and wants to stick to this lightweight principle, it sounds like Koan is the way to go. And please sign the OKR pledge at okrpledge.com. Matthew, last raised funding I think around a year ago, is that right? Is this a big journey that you're on to keep going the series A-B-C routes like you did at Jive? Or is this still open for discussion?

Matt Tucker: We're definitely doing the more traditional approach of raising venture rounds in order to scale quickly. And part of what you have to ask yourself as an entrepreneur is, what is the nature of the problem that I'm solving? Is this one where you need to scale quickly and where the category is going to evolve quickly. And if so, that makes it a good and ventured scale type of company. I'm pretty sure that's the problem, the type of problem that we're tackling. And the reason that we've done funding rounds to grow more quickly. We'll next do a Series A. And then there are a lot of other problems that maybe earlier on and where maybe at some point they will be a venture scale where you need to accelerate the growth. I'm sure we could have a whole other conversation like raising money is not its own goal in and of itself. Not every company needs to. There are many different paths. But that is the path we're on at Koan.

Roland Siebelink: Yeah. And any investors that want to be in contact with Matt, of course, you have a very solid network of your own. But if you need an introduction, you can always ask me and I'm happy to provide. Any last thing you want to leave people with other than signing the OKR pledge and checking out Koan, Matt, as something for them to help you with or something to do.

Matt Tucker: Maybe just a final thought back to that idea of don't forget the basics. Even if you're a startup, I think this is often a question of "I'm a startup, things like OKRs, things like writing down our mission and vision, it sounds so big company." We'll think about that stuff later. We're just trying to build our MVP and ship something and get it out there. And I am a huge proponent of not doing that. You got to scale it down. You have to make it appropriate, even for an early stage startup. But it turns out if you, from the very earliest moments, start building that positive practice and intention, and the muscle strength around that great strategic and operational cadence, you're going to have better results. Even if you're at the beginning, don't assume this stuff isn't for you. Don't go make it complicated. Keep it simple. But do those basics and you will win that gold medal at some point.

Roland Siebelink: Excellent. Well, it was great to have you on,

Matt Tucker: , co founder and CEO of Koan, an alignments platform inspired around OKR methodology and others. Please go check it out on Koan.co and also sign Matt's OKRpledge.com. Thank you, Matt, so much for joining. This was amazing. And yes, we are looking forward to seeing the results come in at Koan as well.

Matt Tucker: : Thanks so much, Roland, for having me.

Roland Siebelink: Thank you.

Roland Siebelink talks all things tech startup and bring you interviews with tech cofounders across the world.