Stacy Brown-Philpot (00:00:00):
It's a fully vertically-integrated company from a furniture creation perspective. And because they're owned by a foundation, they didn't have any debt. There's no debt, they just generate profits, and they reinvest the profits. So that is how we survive, and that's always been the DNA. And so for me, when I, as you just asked me that question, I look back on it, that really was the essence, that ownership structure really was the essence of why the mission question was so important, because they weren't going to buy anything just to buy it. They needed to buy something that they believed in, because they're only a part of something that they believe in.

Eric Ries (00:00:42):
Welcome back to the Eric Ries Show. Today's guest is Stacy Brown-Philpot. She's had a lengthy career in tech. She worked at Goldman Sachs, she's worked for a long time at Google. She was the CEO of gig economy darling, TaskRabbit, and eventually sold the company to IKEA. And today, is on a number of corporate boards, both public and private, HP, Nordstrom, StockX, Joy, and Noon. Stacey is a unique voice in Silicon Valley, having seen some of the iconic moments of the rise of Google, having been a CEO and leader in a whole new category-defining company, and had been a consistent advocate for treating employees the right way, for building cultures where people can bring their whole authentic self to work, and of course, for the importance of diversity.

(00:01:29):
In this conversation, we talk about both the rise of Google, and the loss of its "Don't be evil" ethos. We talk about the difference in coherent cultures, the difference between Goldman Sachs and Google for example, the difference between Google and a tiny startup. And of course, we talk about some of the really famous pivots that TaskRabbit had to endure in order to get to success. She's a living embodiment of a compassionate style of leadership that we need more of in this world. And her views on corporate governance, on culture building, on hiring, are really valuable for founders and leaders alike. So I hope you enjoy this conversation with Stacy Brown-Philpot.

(00:02:10):
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(00:03:03):
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Mercury, the art of Simplified Finances. Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group and Evolve Bank and Trust, members FDIC.

(00:04:15):
Well, Stacey, thank you very much for coming on and making time for this, really appreciate it.

Stacy Brown-Philpot (00:04:19):
Delighted to be here. Good to see you.

Eric Ries (00:04:22):
So I want to jump in the middle, because you were at Google during the "Don't Be Evil" era. You got to see one of the most extraordinary growth stories in the history of technology, and one that has turned out to be a really defining part of the world that we live in. I remember when Google was only a few hundred employees, and I think, what was it, maybe 1,000 by the time you joined, is that right?

Stacy Brown-Philpot (00:04:45):
Yeah, about 1,000 people. That's right.

Eric Ries (00:04:47):
Google, 1,000 people was kind of like a successful tech startup, maybe on track to do some stuff. And by the time you left, it must've been, I don't know how many thousands of people, it must've been-

Stacy Brown-Philpot (00:04:56):
50,000.

Eric Ries (00:04:56):
Oh, my god.

Stacy Brown-Philpot (00:04:56):
50,000.

Eric Ries (00:04:56):
50,000.

Stacy Brown-Philpot (00:04:58):
Yes.

Eric Ries (00:05:00):
So Google at 50,000, is a behemoth, an empire that dominates, not just technology, but the whole world, in so many ways, has so many effects on the world. So start with "Don't be evil," talk a little bit about what the culture of Google was like when you first joined.

Stacy Brown-Philpot (00:05:16):
Yeah, it was fun. And I was just reminiscing with some friends last weekend, about how fun it was in that time. People came in, and they really cared about organizing the world's information, and making it universally useful and accessible. And the fact that even after all, I've worked at Google for 10 years, and I still know that mission statement, everybody really cared. And it was down to the details. We all dressed up for Halloween, and even if you had 10 interviews that day, you walked in with your Halloween costume on. Everybody interviewed, we all wrote our feedback within four hours, of making sure that we could get Candace through fast. We just had a lot of care for the company, and we believed we were doing something more important, more special than what anybody else was doing. I don't know, it was just an ethos of fun and brilliance, and doing the right thing, and "Don't Be Evil" was used.

(00:06:30):
People said that, like, "Oh, this is the wrong thing to do. No, no, no, we're not going to do it. That's actually not right. No, we shouldn't do it. No, we're going to be better than them," whoever them was. It was like a proverbial them, it wasn't really like a real them. Because we didn't even see competition, we saw a possibility, but we never saw, like "Oh, these other people are our competitors." We're just going to do this different and we're going to do it better. Does that make sense?

Eric Ries (00:07:00):
Yeah. No, I remember it really well. And it's hard for people now, who didn't ever get to experience that, to understand the level of idealism that we felt inside and outside the company, about what it could be. And I don't know what your experience was like, and I'm curious, because I was on the outside for a lot of that time. "Don't Be Evil" to me, is like the canary in the coal mine. I watched it go from the slogan and the big part of the S-1 filing, and then it was prominent on the website, and then it started to be a little bit less prominent.

(00:07:31):
And then started to say, "Well, actually it's more complicated than that, the world's more nuanced," And then it's to kind of disappeared from the outside things. But I'd heard from my friends who were there, that it's still in the employee handbook, or it's still here and there. And then to me, the nadir of it all was when the company got sued by some ex-employees for violating the Don't Be Evil pledge, and they had to settle. So to me, it was gradual descent away from that idealistic beginning. What was it like for you?

Stacy Brown-Philpot (00:07:57):
Yeah, it is nuance, and thank you for bringing up the S-1, because we were all proud of it. And when we went public, we were all like, "Oh, my God, is the stock price going to go up?" We didn't even know. We weren't sure. We just wanted people to want to buy the stock. It was very different.

(00:08:18):
And as the company grew from one to 50,000 people, we hit this really big inflection point of 10,000, where it just became harder. It just became harder to get stuff done, and the decision-making framework became more complicated. The fact that we were now a large publicly-traded company, there were lawyers, and people who were talking about all the things we can't do, or we have to do, or we should do, for the safety and protection of the company. And as you know, I'm on the board of HP, which is a $50 billion company, and it's been public for a very long time. At some point, Google became about the company, and less about the people in it. You're trying to protect this organism that is this entity, that's now subject to global laws and regulations, and subject to potential employee losses, like you brought up. But it's just not like we have to protect the survival of this entity, and then all of a sudden, maybe that's at the expense of one person or another person, right?

(00:09:43):
And that's kind of what it felt like. It felt like it went from the people inside the company, to this entity that is this great company with this great brand, that's doing all these great things, and we lost a little bit of humanness, or the human touch of what we were when we were smaller. I think all companies go through that. I don't call out Google as like a, "Oh, my God, they went through this change." It's just part of existence. And if we want a company to exist, those are the forces that come out that cause companies to persist for a long time, but also detract from some of the human nature of what made it, kept the essence of what it was at the beginning.

Eric Ries (00:10:36):
I'm really glad you called it an organism, because that's really one of my beliefs, that these companies are literally super organisms. They're alive, they have their own life to them, and they're not really owned.

Stacy Brown-Philpot (00:10:46):
Right.

Eric Ries (00:10:47):
Even if you're the CEO, even if you're the investor, you don't control it anymore than a parent controls a child. You give birth to it, and then it takes on this life of its own. And I remember talking to a lot of people at Google during that period, and certainly in the years since, that there was this kind of sense of inevitability about it, that it wasn't even a choice that any individual person was making. It was like the forces in the system had depersonalized it, and the focus, as you say, on the human beings involved, kind of got lost as the thing became more and more self-referential. I don't know if you have stories, or examples, of some of the unique experiences that you had, that you could only have going through a kind of hyper-growth transition in life.

Stacy Brown-Philpot (00:11:28):
Yeah. I remember I used to wear my T-shirts, and everyone was like, "Oh, my God, you work for Google," like so excited. And then it got to the point where I wear my T-shirts, like "Oh, you work for Google. Let me tell you how I really feel about the company." And I don't remember if it was a day or a week when that happened, but I wasn't sure what the reaction was going to be. And I still have what I call my vintage T-shirts to this day, that I will keep forever.

(00:12:04):
But that dynamic really happened from an external procession perspective, that was really interesting to watch, because you had people still wanted to come work for the company. I think our acceptance rate was like 3%, like every top university, or something like that. And yet you had these dynamics of people really questioning some of the decision-making inside the company. And I always felt proud. And then I would like... There's a point where I started to brace myself, and it was a very real experience because I felt like I was doing a good job. I remember early on, when we were doing ad approvals, and we didn't have, there was no AI, there was no HS, there was nobody to look at those ads. And we were trying to make sure all the ads were non-family-safe that were not showing. Like if they weren't family-safe, we didn't want to show those ads.

(00:13:05):
And I remember there was a weekend, where a bunch of us just worked to look at these terrible ads from a visual perspective. Some things were poor, it was really bad, and we had to take them out so some five-year-old was doing a search on Google, or a 10-year-old doesn't see it. And we were all kind of rallying to sort of make that happen. And we sat there, and we did it, and we took breaks, and we did it. And we taught the system eventually, to find those ads on their own. And then you move to a world, where it's like, "Oh, my God, we can't look at these ads, because these ads are inappropriate." Well, somebody's got to look at the ads.

(00:13:43):
And then we got to the point where even doing something that was a rallying call to do something that was great for the world, which is clean ads, it moved to a world like, "Whoa." We would've had to take all kinds of decisions to make something like that happen. And then it just wouldn't happen, because somebody would say, "Oh, this is a bad idea. Someone's going to be offended by one ad that shows up, and then we're going to get sued, and then it's going to be in the Wall Street Journal, and it's going to be bad." And you spiral into those worst possible scenario outcomes, and then you stop making, I don't know, these bigger, grand, idealistic decisions.

Eric Ries (00:14:24):
Yeah, it's the loss of idealism, that it's one of those things where you don't really realize you've lost it till it's already too late. And if you don't constantly tend to it, it's hard. And I think the distinction you're drawing is really interesting, between the idealistic view is you do what's right for the customer because you believe in the mission. And so it's really, it's fundamentally about a certain set of people who you feel in service to, and that you use that to rally. And it doesn't sound that different to say that you want to do things to protect the company, but actually that's very different. The steps you would take to defend the corporation from outside critics and attacks, and prevent it from having bad publicity, that's not the same as protecting the mission. And I wonder if you have other examples of that kind subtle shift over time, when you go from this external perspective of being of service, to this kind of internal, self-referential perspective of being defensive, what that was like.

Stacy Brown-Philpot (00:15:20):
Yeah, it's this sort of question of greater good. And so what is the greater good? Well, it was early on where Google, it was like 2000... What year did we do those layoffs? It might've been 2008. It's like the big economic downturn. And the company was sort of bracing itself for... We didn't know how long it was going to last back then, it was scary.

Eric Ries (00:15:54):
Yeah, and advertising collapsed over the course of that, I remember it-

Stacy Brown-Philpot (00:15:55):
Collapsed.

(00:15:59):
We looked inside, and we're like, "Okay, we've never had to do this before. We've only ever been successful. We've only ever grown as a company," or we've slow-grown, but we never laid people off. And I remember when that happened, because it was a point where we really felt like this is what we had to do to protect the company. There's this existential crisis of the financial markets, that's affecting advertising, and we have no idea for how long. The government is coming in and rescuing banks. It was bad, and so we went into protect the company mode. And when I look back on it, it was the first time I ever had to do layoffs, and sit in front of a person, and say, "You don't have a job anymore and it's not your fault," and that's it. And it was so heartbreaking.

(00:16:57):
And I tell this story because there was a humanness to it, where I had a little dog, I had a little Yorkie, and people would come by and see my dogs all the time. But on that day, people came, and like, "Oh, I just did my meeting, I need to just sit with the dog, because man, that was really hard." And that point, I think, changed a lot for the company. It was just like, we are not impenetrable. We can be affected. This is not this rocket ship that's never going to get touched or hit by an asteroid. It was very real, and it was very grounding for all of us. And I think then that might've been part of when there was a shift to much more focus on discipline financially, and some of the things that we used to do, and how we look at the budget for things.

(00:18:00):
I was in finance, so for a lot of time, in my time at Google, and there was like... I remember there were days when it was like, "You have to spend your budget. You haven't spent all your money, go find something else to spend it on." To the days when it was like, "Actually, you only have this much. We can only do one dinner for the three nights of the offsite." It literally changed. And that creates a different DNA in people, and the people that you hire, who stays at the company, how they conduct themselves, what they get rewarded on, all those factors really cause some of that shift to happen.

Eric Ries (00:18:40):
The difference between having an abundance mindset and a scarcity mindset, for human beings, it is really, really different. You get into those kind of zero-sum status games, and all this stuff that happens in the wake of a trauma like that. One of the things I always try to advise people building companies, is to prepare for those eventualities. We talk to founders all the time, they ask their lawyers, ask their bankers, ask whoever, "I want to do this idealistic stuff," but to that, it's too early to worry about that. And then one day, it's too late, and it's like, "Wait a second, it went straight from too early to too late. When was it ever the right time to make the investment in my employees, or to make the investment in corporate governance," or whatever the thing was that they wanted to do. So one of the things I work with a lot of companies on, is to institutionalize your intentions.

(00:19:25):
Don't just be a founder with control, and you set the vision, and you tell everybody what to do, because you could die, you could be gone, things might change. It's a super-organism, it has to be baked in. And I think you're totally right, that we pick on Google totally disproportionately. It's actually very unfair. Google's not even close to the worst offender on so many of these things.

Stacy Brown-Philpot (00:19:43):
Right.

Eric Ries (00:19:44):
I'm saying that only because we wanted it to succeed so badly. And because the idealism was so strong, it's actually a testament to how reverent people felt about Google in the early days. But I wonder if you remember any stories about the company trying to institutionalize its intentions, or kind of failing to do that. I mean, "Don't be evil" is the ultimate example of it just ultimately, became words on a page. It lacked the force of incentive alignment, and the things you needed to build a coherent culture around it. Does that spark any recollections from your time there?

Stacy Brown-Philpot (00:20:17):
When social media happened, and there was Facebook, and Google had its own product, I remember there was this real focus on real names. And if you remember the early days of social media, you could be anything you wanted to be.

Eric Ries (00:20:34):
[inaudible 00:20:35], yeah.

Stacy Brown-Philpot (00:20:37):
And you didn't have to identify who you were. And as Google was thinking through its response in this product, there was a real discussion about using real names. And I remember Larry showed up in this meeting, it was very intense, and it was very real, and it was very much, we are 100% going to force people to say who you are in this product, even if it means we don't succeed. And you can argue whether or not that was the reason why Facebook became what it became, but that decision, that was a point of setting intention. And we become a bigger company. There was real competition, and it was a real point, I think, once you talk about setting this intention of what you want to be and what you want to stand for. My grandmother always telling me, "If you don't stand for something, you fall for anything."

(00:21:34):
And in that moment, they're like, "This is a thing, this is a principle that we will stand for." The other one is a super tiny thing that today, we take for granted. When you enter your credit card information, you have to enter the CVV code. So we started requiring the CVV code, which back in that time, it was like, "I don't want to enter that three digit number," it's like too many steps in the process. The advertiser is not going to sign up, and we're trying to do stuff in Google Shopping, and people aren't going to buy, they don't want to enter this three digit code. And now, today, you cannot buy anything on the internet without putting that code in. And in fact, you store all of your credit card information, so on your iPhone, or your Google phone, so you can just pay.

(00:22:21):
But there was this whole security dynamic, and there was so much fraud. So they were like, "We're trying to prevent fraud. We're trying to reduce fraud, and so we're going to require this three digit code. And if you don't want to put it in, you can't advertise on our platform." And it was a real moment of intention, of protecting people and protecting people's information. And you probably could go to protecting the company, because if we had a big fraudulent incident, oh boy, what would that have done to the trust and the safety of our entire advertising platform? But it was also about protecting people too. And we had a number of small business advertisers, most of Google's money was, at some point, made by small business advertisers, and not large advertisers. And so these people were using Google, it's like this is their only way to market their business. They're on a budget, and you definitely don't want a fraudulent transaction to happen. So those are a couple of examples that I remember from those early days.

Eric Ries (00:23:18):
So as I've been learning more and more over the years, about corporate governance, I've felt like when we talk about a company's culture, there are really two dimensions of it. There's how coherent it is. Coherence is one dimension, and integrity is the other dimension. So how much does everyone aligned around some goal together, and how much can the company act with integrity in the face of outside forces? And what I've noticed, it's interesting because you came to Google from Goldman Sachs, right?

Stacy Brown-Philpot (00:23:41):
Yes.

Eric Ries (00:23:41):
That was another very coherent culture, very different from Google, maybe couldn't be any more different, especially in that era.

Stacy Brown-Philpot (00:23:48):
So true.

Eric Ries (00:23:51):
And it's funny, those two examples, because I've actually used this example with founders a lot, where I say, "Look, I've met companies where there's literally, within the company, there's a little Google over here, and a little Goldman Sachs over here. And although Google might be a very coherent culture that makes sense in its own right, and Goldman Sachs may be a very coherent culture in its own right, you can't have both." They can't coexist, they're so different. So just because it's that contrast, talk about what it was like. Talk about, this is the old Goldman Sachs we're talking about, what was the culture there like, and what was it like experiencing that culture clash as you came into Google with your Goldman expectations on?

Stacy Brown-Philpot (00:24:24):
So Goldman, and this was a time when women still wore suits and stockings. This is something might date myself a little bit, but I had a wardrobe, and it was you go there and you look polished. The culture, as you said, was so coherent, it was so strong. It was all about the people, client service. The client came first, and above all else, and so we did everything, including work 20 hours a day, to make sure we delivered the best possible product that we could for the client. And for the client, it was services. You were pitching your intelligence, your wisdom, your discernment, your judgment, trying to help. I worked in mergers and acquisitions, so you're trying to help a client decide they're going to buy a company, if they're going to sell themselves, and who they're going to sell it to. And so your asset, it's not software, it's like it is the people.

(00:25:28):
And so it was all about that. There was a way, there was a Goldman way of doing everything in the company, to the point where I remember one of my projects, I had a pitch book, and we were flying, we're leaving the country to go to meet the client. And I had to go through every page in the pitch book to make sure that there were no errors, because sometimes printers make mistakes, and they do. And so I found one, where they printed a blank page, so we had to run that thing all over again. It was very late at night, but even that kind of error was just unacceptable.

(00:26:04):
And so what I learned, was it's really strong attention to detail, and really caring about the details and service of the customer. And if you think about Google, Google's all about the user, similar, coherent, clear strategy, focus on the user, focus on the user. Yeah, we got to make money with ads, but really it's about the user. We got billions of users, and if we make them happy, all these other things will follow. So very similar mindset, but I could wear whatever I wanted. I could wear a T-shirt, I didn't have to wear a suit. I could relax, I had a dog at work, we just talked about that. So everybody, other people had... It was just so... And free food. There was no free food at Goldman. There was free food, it was just a very different manifestation.

(00:27:02):
But there also was this obsession about the user. And I ran consumer operations, and I remember we used to do this meeting every three months with Larry, and we would tell him about user frustrations, not bugs, not feature requests, just little tiny frustrations. And he'd come, and you sit there for an hour, and he'd want to know. We had billions of users by this point, want to know how many people are frustrated with this product, and what are the frustrations. And so the cultural essence of the customer was there, but the implementation was very, very different. I took all my attention to detail to Google, and it helped me. It definitely helped me for sure.

Eric Ries (00:27:49):
Yeah. People, a lot of people listening to this now, cannot imagine how important it seemed, really not that long ago, where how you dressed at work was a major factor, and the idea of professionalism bound up in these surface characteristics. This is a legacy from a pre-digital world, where face-to-face interactions were just so much more the norm of how work was done. And we've let all that go in a surprisingly short time, but it did seem really important at that time.

Stacy Brown-Philpot (00:28:14):
So important.

Eric Ries (00:28:14):
Now it's almost laughable, as silly as that, people used to wear hats all the time. Anyway, so you had this culture clash from Goldman into Google. There's a lot of people who've wanted to make a career change into technology. Over the years, I've counseled many of them. I've hired many of them myself. And I've often seen this, the people who struggle coming from a more hierarchical, a more business-y kind of culture, into a more software-driven, engineering-driven culture, just any tips you have for people who want to make that career transition the way you did?

Stacy Brown-Philpot (00:28:46):
Yeah, I think if you're going from hierarchy structure to pretty much any company in tech, and you could argue some of the bigger companies still have less hierarchy than a traditional business, just being able to fill wide space. I loved coming to Google. It's like, "Oh, we don't have a process for this, just create one." Really? Who am I going to work with to create, like not work with anybody? You can just go do it yourself. I was like, "Oh, okay." And so I felt like I was set free to go and just build and create, and just ask for forgiveness instead up of permission. Just having that mindset, if you're coming into tech, most companies still run like that. "We are hiring you because we think you can do five things, three of them really well, two of them maybe, but we don't have anybody else to do those other two things, so thank God you're here. Go." And be okay making lots of mistakes, but only make new mistakes. Like make a mistake, and just don't make that one again, just make new mistakes.

(00:29:54):
And that's a different mindset than you're often trained in. I started my career as a public accountant, so there are no options for mistakes. We were auditing financial statements. So that shift is really this DNA of being able to make, not only new mistakes, but make mistakes, and be able to feel wide space, and set your mind free to be creative, and ask for forgiveness instead of permission. All of those things are really important when you're making that transition. And it's not for everybody. Some people, it's too far out of their comfort zone, but for me, it was really exciting.

Eric Ries (00:30:36):
So you went from Google, 50,000 employees, you went from that to TaskRabbit. Now that's where we first met. And TaskRabbit, I don't know that people appreciate now, what a pioneer TaskRabbit was in, I guess, for a time, we were calling the sharing economy. And now there's so many companies that use the internet to cause things to happen in the real world, and help people coordinate in real world networks, from DoorDash to Airbnb. It's a huge sector of the economy now. But TaskRabbit was really the pioneer of that whole concept. And people, I remember from whatever, 15, 16 years ago, how nuts people thought it was. Was it what, maybe 50 people when you... I'm talking about the contrast between Google at 50,000 people, and not the TaskRabbit when you joined, talk about what that was like. That totally reversed transition now, to go into such a smaller, conceivably smaller-

Stacy Brown-Philpot (00:31:24):
It was 50,000 people to 60 people. And I went from having... We had mother's rooms at Google, and times to sign up for them, and I was a mom by that point, to our pumping room was the swag closet-slash-storage space-slash... It was just different. But it was the sharing economy. They were pioneers. TaskRabbit was pioneering sharing economy, and people were like, "What is the sharing economy?" We know what it means today, but at the time, it was sort, "Well, are we sharing a thing that we both own? Are we sharing space? Are we sharing resources? What exactly are we sharing, and how do we compensate each other for that sharing, and where's the trust and safety around it?" Because the idea that a stranger would walk into your house, cross the threshold of your home, and do something in your house, is crazy. That person could be a serial killer.

(00:32:31):
And so it really was creating and using technology to do something that was sort of done, but let's face it, when I grew up in Detroit, we had people come into our house and fix stuff, but it was like the man around the corner that Grammy knew, and everybody used him before, and we all trusted him, and we knew his kids. And these are people that you knew. Now we're trying to do this with people that you don't know, it was completely different. And here I am, I show up as the big COO, right, from the big company, Google, which I still felt like Google was a small little company. When you grow up inside the organism, you never realize how big it's become because it kind of grows. You don't have the sense of anything, of the bigness of it. And I show up, and they're like, "Okay, what's going to change? What's going to be different?"

(00:33:23):
One of the first things I did was free food, actually, because people were going out to lunch, and I realized how much of a culture inhibitor it was for everybody to leave the building for an hour and a half, but different hours and a half. Some people left at 11:30, some people left at 12:30, so now you had three-hour gap where 60% of the people were there, of the 60 people, and so you're just missing the serendipity of what it means to be building something together. So I looked at the budget, and I was like, "All right, we're going to cut some of this marketing budget, because I don't really understand what it is, and we're going to feed people, and we're going to make the product better." And that was one of the biggest changes I made at the beginning, it was very different.

Eric Ries (00:34:11):
People always think of free food as a perk, a famous perk Google pioneered. Everybody liked it because you get free food. But I remember when Google was big enough that everybody ate in the same cafeteria, around a couple of long tables. And I was taking a tour, someone was taking me around, showing me, and they understood, even the employees understood, the whole point of it was to bring people together, and to get people from different parts of the organization to talk to each other. And so they actually had all these, a lot of policies, even in their early days, where you couldn't just sit with the people you already knew, and everything was arranged to be kind of inconvenient for everybody. You had to physically go to the place. It wasn't really for the food, it was for cultural mixing.

(00:34:50):
What was it like coming into TaskRabbit from the outset? Because you weren't the founder, but you had this big title. It's a classic thing startups do as they need to scale, they start to hire people, people like that. How did you deal with the kind of psychological uncertainty and the stress that the team, startups are always afraid bringing an outside person, what's going to happen? What's it going to mean for the culture? Just talk about navigating that process with the team.

Stacy Brown-Philpot (00:35:11):
Yeah. It was challenging. Leah was very much a huge presence in the company, and the founder culture was still very much part of TaskRabbit. As any founder, that person, who they are, you're there because of them, because you're not sure if this thing is going to make it, but boy do you like this person. That's why you joined the company. And so it was a very strong culture. We had a coherent culture. It was all about the customer, the taskers and the clients, it was very much a part of it. And so I come in, and they're just like, "Oh, my God, the big company COO is here. What is going to happen?" So I got some very good advice from my coach, which was like, "Just tell everybody what you're going to do." So I said, "Hello, I'm Stacey. I'm going to do, for the next 30 days, I'm going to just learn and listen, and then 60 days, I'm going to just tell you all what I'm going to do. There are going to be some changes, and in 60 days you will know what they are."

(00:36:18):
And so that, because a lot of the angst of a new person coming in isn't about what you actually do, it's just about wondering if it's going to happen and when. So if you can take the it, the when away, all you have is the what. So now I only have one thing to worry about instead of three. So I just took those two things off, I said, In 60 days, you're just going to know. We're going to make some changes, and I'm going to tell you what they are in 60 days." And not just alleviated a lot of my stress, and also kind of the stress of everybody in the company about what is this girl going to... What is she coming in here to change?

Eric Ries (00:36:55):
What does it mean?

Stacy Brown-Philpot (00:36:55):
I want this thing to change, I don't want that thing, whatever it is, so I just listened to them. And then at 60 days, I said, "These are the things that are going to change." And there were some things that we were doing, like celebrating everybody's birthday every day. At some point, you get big enough where you can't celebrate the birthdays every single day. We would all gain too much weight, there's cake all the time. So we just shifted to a time when, like "Okay, whose birthday is this month?" We got two in the month. So it was small things like that. But it was also like, "Well, what about the culture?" And then we forced ourselves to think about what about this culture is really important? Well, we're a family, and part of being a family is celebrating things that are outside of the things we do at work, so let's talk about how do we do more of that. So that's just one small example, but that's how I came in, the 60-day kind of if-when arc was super helpful for me, and for everybody else in the company.

Eric Ries (00:37:54):
You and Leah forged a really strong partnership, that in the end, founder succession planning in startups is a notoriously difficult thing. Ultimately, ended with you succeeding her as CEO of TaskRabbit. Talk about what that was like to have the burden of carrying forward the founder's legacy into a new era for the company.

Stacy Brown-Philpot (00:38:13):
Yeah. I mean, it was one of the most... I'm so proud of Leah for so much that she did to build TaskRabbit, I am. One of the things I'm most proud of her for is succession, because I'm on a lot of boards now. We've been through different versions of CEO transitions, and hers is by far the best. We were really good partners, and I didn't come in to TaskRabbit wanting her job. I didn't come in to be named the CEO on some timeframe. I came in to be her COO, and work in partnership with her to build a great business. Sheryl Sandberg was a mentor of mine, and a friend, and the model that she had with Mark at Facebook was exactly the model that we were planning to implement. And so when she decided that she was ready to step down, she told me we were taking a trip to DC together to do some meetings. And we're on the plane, and she's like, "I think I'm ready to transition."

(00:39:18):
And I said, "To what? What do you want to work on?" I'm thinking about redistributing responsibilities. And no, it was like, "I'm ready to transition out of the company." And she had gone through a CEO transition before she hired me. And so for her to just come to me and say that, I was like, "Wow, okay. What do you want to do? What's your timeline?" And we just really just worked out a timeline, and we went to the board together, but we only went to the board together after I decided that I wanted the CEO job. And she's like, "I want you to know, do you want it or do you not? Are we both leaving, or am I leaving?" And so I had to dig deep and figure out for myself, what else can I do? I've been the COO of this company for a few years already. We've done some really great things. What else can I do as the CEO?

(00:40:19):
And so I wrote a document that basically said to myself, "If I were the CEO, what would I do?" And so I shared it with her, and I said, "I think I want the job." And she read it, and she's like, "I think I want you to have the job." And so we went to the board together, and she said, "Look, I'm ready to transition. I want Stacey to be the CEO, here's what she wrote about what she would do." And that's how the transition happened. It was so smooth, the board was very supportive. They really liked the vision that I had, but they also appreciated the process. They weren't told, they had the choice. They could have said, "You know what? Actually, we want to go run a search, and bring somebody else in." But the fact, the way we handled it, and the relationship we had with the board, I think helped everything go very smooth.

Eric Ries (00:41:09):
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(00:42:16):
I'd be remiss if I didn't ask you about pivoting, because TaskRabbit had to go through some really wrenching pivots.

Stacy Brown-Philpot (00:42:24):
Yeah, did we ever.

Eric Ries (00:42:24):
It's one of those examples of, people talk about pivot sometimes, like you do it when you have to do it, when it's a crisis. But TaskRabbit had to do some pivots where things were actually going pretty well, and you had to create the crisis on purpose in order to break through that next stage of growth. So talk about some of the lessons you learned, tell us a few of those stories. What was it like moving over to TaskRabbit?

Stacy Brown-Philpot (00:42:45):
Man, so the biggest pivot we did was from this sort of Etsy for services, you can get anything done on TaskRabbit model, to just a few things, and a direct-to-hire approach. And I think that that was major, because everybody wanted an Etsy for services, or eBay for services. They wanted something like that. But the fulfillment was terrible, I think it was like 50% chance of getting your task done on TaskRabbit. The compensation for the taskers was unfair, some people were making $4 an hour, some people were making $400. We had no control over it because it was a true auction, and the market cleared where it cleared. And if people were willing to work for less than minimum wage, they did. And so we said, "Okay, we can't grow the business this way. From a values perspective, this is wrong." And today we even have issues with people making minimum wage when you work on one of these platforms.

(00:43:59):
But also just from a business model perspective, our LTV to CAC in a consumer business, is the thing you live and die by. And our LTV to CACs we're not good.

Eric Ries (00:44:08):
[inaudible 00:44:08] growth right there.

Stacy Brown-Philpot (00:44:10):
That's long-term value over customer acquisition costs. It was not good. And so I was like, "We're never going to be able to raise more money, and we're never going to get profitable if we don't improve our LTV to CAC." And there were so many clients who had hacked the current model for their good. They had systems of how to get the best rate, and find the best people, and negotiate. And those people were not happy when we changed the model, where you had to look at all the testers and figure out who you wanted to hire, and see their hourly rate, and accept that rate, or pick somebody else. And we set the lowest hourly rate at the highest minimum wage in the country so nobody would ever be making less than minimum wage. And so it became expensive, and so people were very unhappy.

(00:45:05):
We also cut a ton of categories out. We stopped taking people to airports. I don't know if you remember that, that was a thing. We stopped a lot of things. And a lot of people were upset, "Well, I made my livelihood on TaskRabbit, doing these things that you're not doing anymore." But we were never going to grow. So I remember when we launched this, and we had a plan, we asked, "Are we going to wait 45 days?" Because we can't let week one and week two be the bellwether of whether this new business model is working or not. We're going to wait at least a month. And we launched it in London, which was a new market that didn't have the history of the United States. So we knew it worked in a new market, and then we brought it back to the US, and literally, three weeks in, I remember sitting there with Leah and Brian Leonard, who was CTO at the time. We were sitting there, and we were just scared, because our revenues dropped significantly, because we cut all these categories.

(00:46:10):
And Ted Crunch wrote an article about it with the flaming TaskRabbit logo behind it. I mean, it was like, "This is bad."

Eric Ries (00:46:19):
Major controversy. For those that weren't around at that time, it was a major controversy.

Stacy Brown-Philpot (00:46:22):
Major.

Eric Ries (00:46:22):
And for those that weren't there, it was a bit like the Craigslist of this whole category. So now each of these individual tasks, there's a whole public company, multi-billion dollar company that just specializes in doing that specific task, and having the structure around it is what makes the thing possible. TaskRabbit, in the early days, you could use it for anything, and this pivot required a little bit more of a structured process. It ultimately was more fair for both the consumer and for the people doing the tasks, and yet it was like a major five-alarm fire for the company. How much did your revenue drop? Do you remember?

Stacy Brown-Philpot (00:46:58):
Oh, man. So we cut half the revenue. It was about half the revenue, because we had home services, and then we had kind of everything else. But our ALDs, average order values, for home services, was higher than most of those other categories. So we said, "If we get more of these tasks, we'll make more money." But we had to lose the money in order to make the money.

Eric Ries (00:47:20):
Very few companies can endure a 50% revenue drop, and have the courage to get through it. Were there any moments when you doubted? Did you think about going back? Did you have a moment where you're like, "I hit rock bottom here, and I am not sure if we made the right call?"

Stacy Brown-Philpot (00:47:37):
We had this war room, and like I said, we were all in there, and we're like... We had some early metrics that we wanted to see, which was how the taskers were setting their hourly rates, how much availability they were giving us in this new model, because we needed them to tell us when they were available, and they needed to sign up. Their adoption, we wanted to see that. So we started to see some of these early signs, but there was definitely a plan. We had a rip the cord plan, Eric, where if this thing dropped below 30%, then we'd be like, "Ah, we made a mistake," but we never got there. We never got there, but it was pins and needles for a little bit of that time, where we were just trying to see, is this going to work? Is the press going to die down?

(00:48:25):
And the press did die down. And it turns out a lot of the press was very much like Silicon Valley tech press, because at this point, TaskRabbit was national. We were operating in many cities around the country, and most of those people didn't even see the TechCrunch article. They just said, "Oh, the model changed. What does this mean? Oh, wow. That's interesting. Actually, I like the idea of seeing the ratings and reviews, and reading stuff about these people." Oh, that's really... So then that started to take over, and it all worked out.

Eric Ries (00:48:58):
I remember you and Leah used to do customer service calls, and go on tasks, actually use the product. Were you on the receiving end of customer complaints and their disappointment during that time? What was that like?

Stacy Brown-Philpot (00:49:12):
I remember sitting on my couch. So we agreed to take calls from clients and customers who were, anybody who wanted to call you, to take a call. But most of the people who called were heavy users. We had some customer concentration in our revenue, and there was some high power users. Some of them were EAs at venture firms, and they used us for everything. And some of them were just individuals, moms who lived at home, and just had just TaskRabbit their whole life, and here we were changing it. I remember sitting on my couch and doing calls. At home, it was like 7:00, and this lady wants to talk to me at 7:00. And I had this little kid at the time, and I'm sitting there, and she's just cursing me out. She's yelling at me, she's mad. She's like, "I can't believe you're doing this. Do you realize what you're doing? This is going to kill the company. I can't believe you guys are doing this to me."

(00:50:03):
And I am just sitting there, and I am about to be in tears, and I'm just listening. We're not going to change it because of her. And I could feel her pain, but it also... I got off the phone, and I said, I realized, "Wow, she really thinks this is her company." She's so invested in what we do, that she wants to call me 7:00 PM, and just rip me a new about the strategy because she's so invested. I was like, "We're doing something powerful," where the customer's like, "No, this is my company. You can't change it," that's a real special thing. So I had to make lemonade out of lemons, because those were some tough few weeks, where I had to sit through those calls. On the opposite side, I had a call with a woman in Chicago, I'll never forget it, where she told me that she used to provide writing services to people. And we stopped doing that. A lot of times, that stuff was fraudulent, and we'd find that out later.

(00:51:10):
I'm not saying she was, but she called me, and she said, "I do these writing services. I used to be a paralegal, and I have to be at home." And she was just in tears. And she said, "I don't know how I'm going to pay my mortgage next month, because, you know, TaskRabbit was my primary source of income," and it was heartbreaking. So I had the one person cussing me out, and I had the other person giving me this story, and it was so heartbreaking. And so we ended up jumping in to try to help her find other ways to task on the platform. And ultimately, she was never as active as she was in the prior services, but we did find something for her to do.

(00:51:49):
And I just remember that because just as much as she felt like, "This is my livelihood. You are killing my livelihood." And so when you're making decisions as a company, where people say that stuff to you, you really have to be grounded in why are we doing this? What are we doing it for? Who are we doing it for? Is it the right thing? And we felt like we knew it was the whole way, but it certainly didn't make it easy to have to listen to those types of conversations.

Eric Ries (00:52:19):
Yeah, I appreciate you sharing that story. Those of us who've been through product market fit, the so-called crossing the chasm moment, had to deal with passionate early adopters. I've been on the receiving end of those phone calls a few times in my career, and it's-

Stacy Brown-Philpot (00:52:28):
Yes, I'm sure you have.

Eric Ries (00:52:30):
It is not easy. I mean, it is very, very difficult. But the thing you said, the critical thing for people to realize, is that those customers, those stakeholders, is the fancy language we use for it now, those human beings, they think it's their company. And that level of trust you have with them, and especially for a platform company like TaskRabbit, that's the company's really only asset, more than its technology, more than its customer contracts, or whatever, at the sense, this sense of trust. And I appreciate in your story, some people think because it's going to be painful and difficult, just don't listen to the customers. You didn't have to take those phone calls, I'll turn off my phone until the fury dies down, to heck with it.

(00:53:09):
And other people say, "Well, if you're causing someone pain, you got to reverse course. You can't do it." But you found that middle path, to say, "No, we're going to be grounded in the reality of the consequences our decisions have for real human beings. We're still going to do what's right, and we're going to find ways to mitigate when we can, but we're going to not forget that we have a responsibility to people." That's ultimately where trustworthiness comes from. Because if you're not willing to make that sacrifice yourself, why should anyone believe that you'll be there for them when the time comes?

Stacy Brown-Philpot (00:53:38):
That's exactly right. That's exactly right.

Eric Ries (00:53:42):
Okay. So another unusual thing about TaskRabbit is that it was ultimately acquired by IKEA.

Stacy Brown-Philpot (00:53:49):
Yes.

Eric Ries (00:53:49):
And that's not someone we normally think of as a tech acquirer, that's not the typical outcome that a startup has. But IKEA is also famous for its corporate governance and its structure, and its very long-term outlook. Although, I remember when it happened, I was surprised. When I got over my surprise, I said, "Oh, there is a certain logic to that partnership." Talk about how that came about. What was it like to sell the company to IKEA?

Stacy Brown-Philpot (00:54:10):
Yeah. So another coherent culture, I like your word, coherent culture. Very strong, founder-led culture for 90, I think, he lives 99, 97 years, up until the very end, like founder-led culture. And we performed, we completed a lot of IKEA furniture assemblies on the TaskRabbit platform before we even met IKEA. In 2015, they came to California just to do a tour of Silicon Valley. Jesper had just become the CEO, and it's important to know about his background, but he worked very closely with the founder of IKEA on the innovation side.

(00:55:04):
So the way that IKEA, they have an entirely unique innovation process to make very cheap bowls for $0.25, for example, like affordability and quality. That does not come easy. And so he worked in that team, with the founder, and moved in to become the CEO of IKEA, running all the retail in the store, so he was very interested in learning about innovation and what was happening. And so a team came over to Silicon Valley, and they had a meeting with us, and the meeting was to just introduce TaskRabbit. And we shared with them how many people use TaskRabbit to assemble a Billy bookshelf, which is one of the simplest, in their mind, bookshelves that you can sell.

(00:55:59):
And we said, "These are the number of people. This is how much they spend, it's almost as much as the bookshelf itself." And they just realized, whoa, there's a whole category of customer here, that does not see our products the way that we see them, which is easy to assemble, and are willing to pay a premium to get it done faster, or in some cases, correctly, by someone else. And so as they were growing, we explored a partnership. Well, let's partner. Let's actually see how real this is. Even though we had the data, we're like, "Here's the data. It's pretty real." Let's do a partnership.

(00:56:39):
And at that time, 90% of IKEA's revenue still came through the stores. They are still the world's largest furniture retailer, and most of that was not online. You still had to walk into the IKEA store to get whatever it is that you wanted. So we picked one store in London, because we wanted to be in Europe, which was closer to them, and said, "Let's just try to see how many people buy stuff if they knew somebody else was going to put it together." Turns out a lot of people bought more stuff, and bought more expensive stuff, because somebody was going to put it together. And so that partnership was successful, and that's what ultimately led to the acquisition.

Eric Ries (00:57:19):
Do you want to say anything more about just what the acquisition was like, or the before and after? I can dive into that more, but I wasn't sure if that's something you feel like you can talk about.

Stacy Brown-Philpot (00:57:26):
Yeah. The one thing that made this acquisition work, and it's as important to sort of understand, because a lot of startups, they want to sell their company someday. No, they don't, they want to go public. But if they can't go public, then they want to sell the company. Somebody told me, when I was still the CEO, we hadn't even gotten into anything with IKEA, said "You know, Stacey, a lot of people are going to want to buy your company. It's a very attractive asset. It's a great brand, it's a good business. You should make a list of who you would entertain an acquisition from." And I said, "I'd love IKEA to buy the company. I don't know anything about it, but who doesn't love IKEA? Everybody does." And so what happened in the process of this partnership, was we actually had to make some real decisions on how much to invest in the partnership, versus other things we could spend our time on, because no tech company ever has enough engineers, right?

(00:58:27):
So as a result, I spent time on this partnership, and had I not had that mindset, I don't think that... We may have made some different decisions about how to prioritize it. IKEA also spent a great deal of time understanding our values and our mission, our purpose, what we were here for, because they're a very mission-oriented company. I remember showing up at one of the meetings, and I had my deck, I had my metrics, I had my numbers, I had my co-work charts, I had all kinds of stuff. They're like, "We just want to talk about your mission and your values. Can you walk us through them, and how you live them every day?" And so that, to me, became, wow, if we get acquired by this company, this is going to be a great long-term partnership. And it has been. It's not perfect.

(00:59:13):
A big company buying a small company, there was lots of stuff we had to sort through in the beginning, particularly around just how we're going to all work together. But the company is still thriving today. I just had some tasker at my house last week, putting up some things in our bathroom, and it still works. The business model still works. And they really wanted, I wanted to leave a legacy, and I didn't want TaskRabbit to get absorbed into this bigger entity, and like gone forever. And they wanted the same thing. And so they have a new CEO, a new leader, and TaskRabbit still has the legacy that I left, and it's grown from there. They're in eight countries now, and the business is successful. And so while no acquisition is perfect, and you probably didn't hit all the metrics that they presented when the champion got up there, and said, "We should definitely do this deal." But the business is a good business, and it's good for everybody.

Eric Ries (01:00:17):
IKEA is unusual, in that it's owned by the IKEA Foundation, which has always been a key to that mission.

Stacy Brown-Philpot (01:00:20):
Right.

Eric Ries (01:00:20):
Did you ever cross paths with the foundation, or was that part of your thinking about joining a mission-driven company, that knowing that they would have that kind of long-term stewardship perspective?

Stacy Brown-Philpot (01:00:30):
Because they're owned by a foundation, means that they have a long-term perspective. They are vertically-integrated, down to the wind farms that power, when they cut down the trees, and the forest that they own. So it's a fully vertically-integrated company from a furniture creation perspective. And because they're owned by a foundation, they didn't have any debt, there's no debt. They just generate profits, and they reinvest the profits, so that is how we survive. And that's always been the DNA. And so for me, when I, as you just asked me that question, I look back on it, that really was the essence, that ownership structure really was the essence of why the mission question was so important. They weren't going to buy anything just to buy it. They needed to buy something that they believed in, because they're only a part of something that they believe in.

Eric Ries (01:01:27):
Looking back on your whole startup experience, what are some reflections, or lessons learned? Anything you wish someone had told you, or you wish you'd done differently? What comes to mind when you look back on the whole arc of that experience?

Stacy Brown-Philpot (01:01:39):
I would say I've had so much fun. If I look at the arc of everything, most things are unbelievable, like you can't believe this is happening. I remember when we were launching TaskRabbit in Germany, and I got to have lunch at the Parliament, and we were talking about just women in tech. How does that happen? And I bring that one up because there's so much that happens when you're grinding, when you are just trying to find properly product market fit, scale product market fit, man, are we going to make it? Are we going to get to a $100 billion dollars? Are we going to ever be profitable? Or boy, are we going to get this round done or not? Is this partnership going to work out? You have a family now, you're getting married, you have kids, and all that stuff is happening right along with it. But when I look back, none of that stuff sticks with me as being so, so hard. It stands out as being really, really worth it.

(01:02:47):
And the fun things emerge, which is like that dinner, and that time I interviewed Michelle Obama. So this thing where I got invited to interview Michelle Obama at the Oakland Arena in 2018, and I don't know how they asked me to do it. Somebody knew me, and they said, "We want Stacey to do this." I had this... We had a speaker series at TaskRabbit, and I had the team go in the Google doc, and say, "Who do you want to come for the speaker series?" And people wrote down all kinds of people, that most people we could find and we could invite, but somebody wrote Michelle Obama, and there were lots of plus-ones next to it. And so when this opportunity came up, I was like, "I'll do it, but only if I can bring my company for free," because it wasn't a free event. And they're like, "Okay." And so even that was a moment of, I know people work so hard, and they did so much to make this company successful. And here we go, now we can go see Michelle Obama. I got to-

Eric Ries (01:03:50):
Oh, that's super cool. You've also been on a number of boards. So you've been in corporate boards, both private companies and public companies, and so you've had to confront a lot of issues of corporate governance. And I feel like I want to ask you, before we even get into the specific boards, what's your view of the role of a board? Most entrepreneurs especially, don't have really have any idea what corporate governance is, so just what is it? What makes a good board member, and what is corporate governance?

Stacy Brown-Philpot (01:04:16):
Yeah, so the lawyers will say the board has two responsibilities, duty of care, duty of loyalty. So you care about this company, and that is your priority as a board member. Whatever other priorities you have exit the room when you come into this room. And whatever decisions you help the company make are really in the care for the company. Duty of loyalty is really... And you are prepared. You don't just show up, like on a whim. You actually prepare, and learn what you need to learn, in order to be the best kind of board member that you can be. Other people say the board member is our number one job. Our only job is we hire and fire the CEO, meaning we don't get to manage the company, we don't get to run the company. We just have to make sure we have good leadership in place. We agree with the strategy that this person is executing. And if they're doing a great job, we reward them for it. And if they're not, we replace them, and we bring somebody else in.

(01:05:13):
So both of those things are actually true, duty of care, duty of loyalty, and the responsibility of hiring, finding the CEO. So that's what a board does. And so governance is exercising this duty of care, this duty of loyalty, representing shareholders, making sure that you, as a representative, are advising, monitoring, ensuring that the person, the CEO that is running the company, is doing the things that they said that they are going to do, in a legal way. That's really it. That's what a board is.

Eric Ries (01:05:53):
So I think the first public company board you joined was HP, is that right?

Stacy Brown-Philpot (01:05:56):
Yes, that's right.

Eric Ries (01:05:58):
Who have been around for a really long time. That's a remarkable company. It's such a pioneer in so many of the practices that we take for granted in Silicon Valley now. How did you come to be on the board? How did it happen?

Stacy Brown-Philpot (01:06:09):
It was such... I don't call it a serendipitous experience, because I tell people that the most important thing that I did to get on a board, was to tell everybody that I knew that I wanted to be on a public company board. If I'd seen you in that time, "Eric, I want to get on a public company board."

Eric Ries (01:06:27):
How did you know that that's what you wanted to do? That's unusual.

Stacy Brown-Philpot (01:06:30):
I told everybody. I put together a board bio, I met some recruiters, and I told everybody that I knew. And so what happened is-

Eric Ries (01:06:42):
But why did you want to be on a public company board?

Stacy Brown-Philpot (01:06:45):
Because I had become the COO of a company, so I had kind of a TC level, and one of my mentors said to me, "Well, the next level is the board." I was like, "Oh, what's the board?" This man named Ken Coleman, who's like legendary on the Black community in Silicon Valley. And he said, "It's the board. The board gets to hire and fire the CEO." I was like, "Oh, I want that." That's the next level. And so that was sort of how I decided it. And being on a public company board would've been just very different than the private company world that I was in. So for me, it would've been learning and a growth opportunity, and a chance for me to stretch myself in different ways.

Eric Ries (01:07:26):
Then you joined the board of Nordstrom, and you were there during the pandemic, right?

Stacy Brown-Philpot (01:07:28):
Oh, man. Yes.

Eric Ries (01:07:32):
That must have been an incredible experience. Talk about what that was like to be... I want to know, obviously, being in the company in a challenging time, that's a challenge in itself. But also as an operator yourself, having to wear the governance hat, and not being able to go in and do the operations, talk about how you've been able to manage that in yourself.

Stacy Brown-Philpot (01:07:50):
So I was still at TaskRabbit during the pandemic, when it started, and I was on the board of Nordstrom. And so at TaskRabbit, we were not shutting down the marketplace, getting people to do tasks outside, re-architecting the business model so a tasker could still make income. That was all happening. And then you've got Nordstrom, where they had to shut down the stores because legally, that was sort of the requirement. IKEA, we were owned by IKEA at the time, they had shut down their stores. And then of course, George Floyd was murdered, and in some cities there were protests that turned violent, unfortunately. And so people from those stores felt very unsafe when the stores finally did open back up.

Eric Ries (01:08:39):
Violence at retail stores, yeah.

Stacy Brown-Philpot (01:08:41):
Oh, yeah. Windows were smashed, things were stolen, things were boarded up. It was really scary. And I remember Pete and Erin calling me, and Shelly, and Glenda, the three Black women on the board, the Black people on the board, and was like, "What should we do? How should we respond?" And that's when you feel proud that there's diversity on a board. Because yes, we're doing our governance, our duty of care, and our duty of loyalty, but I'm like, "There's a crisis, and you need an expert, or you need somebody who can relate, you call them."

(01:09:23):
And so no, we couldn't go in and do the management's job, but we could help Eric and Pete craft the right message. What are we going to say about George Floyd being murdered? Okay, what are we going to say about the riots and the protests? And boy, some of our stores are getting trashed, and the windows are broken, what are we going to do? What are we going to say? And so you shift to what would you want for your community to hear from a company like Nordstrom, which is an iconic brand that cares about the customer, and you get a chance to influence that message. And so while you're not executing, you influence a lot of decisions that may feel like they're in the background, but are incredibly important.

Eric Ries (01:10:07):
It's such a great example of how diversity increases the surface area of opportunities for serendipity, because of course, you don't know what kind of crisis you're going to face in the future, but the more different perspectives you have access to in your whole enterprise, the more likely that comes up.

Stacy Brown-Philpot (01:10:21):
Exactly.

Eric Ries (01:10:22):
Someone will have the relevant expertise and connection. I feel like I have to ask you, because we've been at this long enough to have seen diversity and DEI, and whatever, go through these backlashes, and different phases as everyone can't quite decide what they want to do about it. And I feel like one of the classic excuses people use, this is the dark side of coherence. We're talking about coherent culture. A very cheap way people think they can get coherence is to only hire a very homogeneous group. And there's a very famous investor in Silicon Valley, who when he got his start, very famously refused to hire anybody that played basketball. And I remember when that came out, people talked about it as an example of thinly veiled racism. I was like, "It doesn't seem that veiled to me. That seems very clear what we're doing."

(01:11:06):
It was very funny, the problems of, "I don't want to get into it," that specific example, they had a lot of problems that maybe would've been helped with a little bit more of a diverse perspective. I know you must have encountered that in your career. What are your thoughts on DEI, and kind of how things are playing out now? And how do you make the case to people that that's important, even in the face of this kind of histrionic backlash we're seeing now?

Stacy Brown-Philpot (01:11:31):
Yeah, it's a backlash, but it's also like if we go back enough decades, it's really just a cycle. It really is, right? And if you accept that, if you're part of a diverse community like I am, we sort of are like, 'Okay, we're in this part of the cycle." I just really think it's so important to do our part, all of us to do our part. And I remember being at Google, and we started the Black Googler Network, and that became the seminal kind of employee resource group at the company. And they obviously did much more after that, but it's still very well-known today. And it really shifted how they looked at hiring Black people and diverse people in the company. And while they're not perfect, it was progress.

(01:12:23):
When HP split, that's when I joined the board. Meg Whitman said, "I want two diverse boards. There's two HPs, and both of them are going to be equally diverse, and I want to make sure we have diversity in age, experience, gender, race, everything." And she did. And so really being intentional about it, and going to the recruiting firm, saying, "We want diversity." And so I've seen a lot of recruiters not do that. They just will give you the best candidate, and then you have to go ask them and demand it.

(01:12:59):
And this was in 2015, this was before 2020, and so demanding these things when you're sitting in these positions and you have the power to do it, is when it matters. And so as a CEO, and a Black female CEO, there were certainly times in my life where I was like, "Okay, I really, I want to fit in. That's going to be my best way." And now I'm like, "You know what? Actually, you have to see me for all of who I am, and that's it. And if you can't take that, then we can't work together." And I think the more all of us show up in that way, with the empathy of understanding and respect, then we can stop talking about backlashes, and this is good or this is bad, but we just got to get through this cycle. And there will be another positive cycle in the next three to five years. It's going to happen. It's unfortunate, but that's kind of the way that it is.

Eric Ries (01:14:00):
Listen, for those who haven't studied this, and only see it through the lens of political polarization, the data is unequivocally clear that diverse groups make better decisions, and diverse companies have real assets. So it's one of these things that can't go away because the underlying business reality of it is so clear, and in fact, takes a lot of noise to obscure that clarity in order to avoid dealing with it. But I just want to say I appreciate the-

Stacy Brown-Philpot (01:14:24):
And all the firms have written this. McKinsey, every well-respected consulting firm has done this research report, and looked at diverse boards, diverse teams, diverse management teams, diverse companies. It's proven. We know it's proven.

Eric Ries (01:14:42):
Yeah. So if you have a few more minutes, I want to do just a lightning round of a couple things that you've said over the years, that I just want to give you a chance to react to, because this is one of my favorite parts of doing these episodes.

Stacy Brown-Philpot (01:14:53):
Sure. Let's do it.

Eric Ries (01:14:54):
Okay, well, so this theme of bringing your whole self to work, that's one of my favorites of your sayings. I've heard you say that a lot of times over the years, and talk about just the competitive advantage of being an employer where people feel like they don't have to put on the fake suit of armor to pretend to be somebody else, but they get to bring their whole self to work.

Stacy Brown-Philpot (01:15:12):
Yeah. That just gives you the opportunity to get the most out of people. They want to stay at work longer. They're less likely to want to go home. They build community, they build friendships, and that's a competitive advantage because that increases your retention, reduces your attrition, and you keep people in the company longer. You make better decisions when you feel psychologically safe. Your judgment is enhanced. And so now, when you're making a hard decision as a company, you're going to make better decisions because of it.

Eric Ries (01:15:46):
You once said that there's wheat and chaff in every job. What does that mean?

Stacy Brown-Philpot (01:15:50):
There's good stuff, and things that you like about every job, and then there's the stuff that you hate. My staffer, when I was in investment bank at Goldman Sachs, told me that, because they were like, "I wanted to work on some really interesting deals." He's like, "Stacy, there's wheat and in every job, and I'm going to try to give you as much wheat as possible, but you got to take the chaff." And that's just life. I'm a parent. Same thing, there's wheat and chaff in parenting. There's some good stuff and there's some stuff I wish I didn't have to do, but I have to because I'm a parent.

Eric Ries (01:16:18):
So true. You talked about that in order to see the future, you have to know that there's something that people don't even know that they want yet. And I wonder if you could just talk about how you've had to see the future many times in your career, just how do you figure that out if no one knows what they want yet?

Stacy Brown-Philpot (01:16:33):
Yeah. I like to think about head, heart, and gut. A lot of people make head decisions. They want to... I'm going to do the math on this, and get it right. My heart is I'm so compassionate, I really want to help these people. But your gut is the thing that really tells you this is the thing that you should do, even if nobody believes that it can happen. When we're pivoting TaskRabbit, oh man, our gut was like, "This is a thing that you should do." And so learning to listen to your gut.

Eric Ries (01:17:07):
You mentioned white space earlier in our conversation, and I think I've heard you say that it's something you look for in hiring, that you want to hire people who can fill the white space. Just explain what is white space, and why do you want to hire people who can fill it?

Stacy Brown-Philpot (01:17:19):
I believe that constraints breed creativity, and if you give people the white space, here it is, and you put them in it, the creativity will happen. And I want to hire people like that, because I hire people who can do things better than me, and I want you to be better than me, and have better ideas than I have. And the only way to really allow that to come out,, is if you give them the white space so that they can be creative in it.

Eric Ries (01:17:52):
All right, last one. This is a very famous quote that I think goes back to Sheryl Sandberg, who I know has been a mentor of yours, that when you want to figure out what to do with your career, the most important thing is just to find a rocket ship and get on. And I think you said that she gave you that advice once, and actually, she's given me that advice too, so I can attest, it's very powerful when delivered in person. But you said it boils down to finding a company with a lot left to build. So for those that are inspired by your journey, and the rocket ships that you've been on, what's your advice? How do we follow Sheryl's maxim, and find that rocket ship to get on?

Stacy Brown-Philpot (01:18:28):
Yeah, it's so true. Because if you think about there's a lot left to build, there's a lot left to go, that means there's a lot left for you to grow. And putting yourself in a position where you've got a lot of growth to do, means you're going to make some mistakes along the way, but not new ones, not old ones, but just new ones. But you're going to grow. And so the growth, the rising tides lift all boats, like they will lift your boat too. And because of that, the rest of your impact that you can have is massive.

Eric Ries (01:19:06):
Stacey, I want to just say thank you so much for making time to do this. I love ending on that note, because it's such a powerful thing, that ultimately, growth, our individual growth, is what powers the organizational growth of these super-organisms. And so putting yourself in a position to try new things, I love the idea of making every mistake only one time. If people can follow that, just that one simple maxim, they can go really far. And so thanks for being a pioneer, for being a leader, and for sharing your wisdom with all of us. Really appreciate it.

Stacy Brown-Philpot (01:19:36):
Thank you for having me. This was fun.

Eric Ries (01:19:39):
You've been listening to the Eric Ries Show. Special thanks to the sponsors for this episode, DigitalOcean, Mercury, and Neo4J. The Eric Ries Show is produced by Jordan Bornstein and Kiki Garthwaite. Research by Tom White and Melanie Rehaq. Visual designed by Reform Collective. Title theme by DP Music. I'm your host, Eric Ries. Thanks for listening and watching, see you next time.

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