Jeff Robbins interviews Andy Tryba of Crossover.com about the future of work, this idea of a cloud wage, building company culture, and radical candor.

Here’s the transcript:

JEFF: Hello friends. It’s Jeff Robbins, and this is Episode 79 of the Yonder Podcast, where we talk to company leaders and big thinkers, about how to make remote work. We’re focused on expanding the remote work job market, and helping listeners to create happy, productive, distributed teams. This time, we talk to Andy Tryba, who is the CEO of Crossover, which you could find at crossover.com. They’re an interesting company that helps other companies to build their remote work forces which comes in super handy for Andy because he also runs a private equity firm and he’s the CEO of Sacoco and a whole bunch of other companies. We’ll list off some of them on the podcast. He also worked as the Director of the President’s Council on Jobs and Competitiveness at the Whitehouse, as part of the Obama Administration. So, Andy’s been thinking about work and the future of work and how remote work fits into all of that stuff for 12 years now. Great conversation. We talk about the future of work, we talk about this idea of a cloud wage, building culture and radical candor which is a book that comes up sometimes on this podcast. 

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Alright. Let’s get to our interview with Andy Tryba.

JEFF: Hi Andy. Welcome to the Yonder podcast.

ANDY: Great to be here Jeff, thanks for having me.

JEFF: Yeah, it’s great to have you on. (3:13) So, the first question I traditionally ask our guests is, where are you talking to us from today?

ANDY: I am talking from Austin, Texas, where it’s finally turned into Fall a little bit.

JEFF: Yes, well here in New England I can you foreshadowing of Fall. The leaves are falling. [laughing] But it’s nice to know that it’s not this cold everywhere quite yet. Austin is a great city. (3:42) Have you been there for long?

ANDY: I moved here about 5 years ago from the Northern California area.

JEFF: There must just be truck lines; one-way trucks from northern California to Austin. [laughing]

ANDY: I think that the last stat that I saw, that there were 150 people a day moving to Austin, and I tell you what, when I look out my window here, with the number of cranes and buildings going up, it really looks like Beijing. So, it’s definitely not a secret anymore.

JEFF: No, it’s really something. I’ve been visiting Austin for probably  25 years now, and it’s a whole new city, and it’s good, but it’s also starting to suffer from some of those [laughing] same difficulties that some of those northern California cities have had.

ANDY: Yeah. Indeed. But the people here in Austin continue to be great. The texting is great. You got the university here. You’ve got a music scene. A great foody scene. Those are the reasons why it always ranks in the number one or number two of great places to be in the United States and I love it. Truly, it is about the people here.

JEFF: Yeah. It’s a great town. (5:03) Let’s get you introduced to the people. I have you listed here as the CEO of about a dozen companies, [laughing] and you’re an entrepreneur, and I’ll let you introduce yourself, you do it better than me.

ANDY: I’m the CEO founder of Crossover, which is one of the largest remote talent marketplaces; we’re in about 130 countries, but I think from that I also have a private equity firm called Think3, where we buy a bunch of B2B SaaS companies and we put a bunch of that remote talent into these companies and that’s a big part of what we do there. Then I have a bunch of different nonprofits including a nonprofit version of Uber and Lyft here in town called Ride Austin where we also use local talent and remote talent.  So, definitely got my hands in a few different things, but it makes it more and more interesting every day I come to work.

JEFF: (6:04) You were telling me, as we were warming up here, that you also just bought Sococo, which is a product that’s been mentioned on this podcast a bunch of times, sort of a virtual workplace software. Cool stuff.

ANDY: I love Sococo. That’s probably one of my favorite acquisitions that we’ve had to date, and I’ll certainly be happy to talk about it later, but it’s really all about building culture in remote teams and I can tell you from managing remote teams over the last 15 to 20 years, that building culture is always the hard part. You can obviously use lots of different communication tools, and audio videos gotten great but building culture is so much harder and it does that phenomenally.

JEFF: (6:54)  Maybe we can start in a zoomed-out way. Talk to me about your experience with remote work, your perspective on remote work, several of the companies that you’re involved in, probably most prominently Crossover, are built on the foundation of remote work. What’s your current philosophy around remote work and how has that evolved over time? 

ANDY: I was at Intel for 14 years and I was in the U.S. Whitehouse for about a year, in the previous administration. [laughing] I have to clarify that  nowadays.  

JEFF: [laughing] Thanks for clarifying.

ANDY: [laughing] My role at Intel was very much on the future of work, and we’re obviously looking at it from a hard work perspective, but Intel’s an interesting company. It’s the only company I know that you have to basically dig a big hole in the ground, throw about $15 billion into it and in five years, hopefully you’re right. So, therefore we spent a lot of time studying different devices and what have you for the evolution of silicon, but you really understand it’s all about teams, and how those teams interact. The first conclusion, of course, we saw that everyone sees now, which is, everything goes in the Cloud. Hardware goes in the Cloud, but then software goes in the Cloud, which of course are trivial, but I think the piece that is still emerging is that if software is in the Cloud all of your jobs are nowadays interacting with that software, in one way, form or fashion, so your job is actually in the Cloud also. So, the whole notion of remote, it goes hand in hand with the Cloud movement, and all of a sudden you can start thinking about jobs and teams in the same Cloud dynamics; infinite scalability, finding the best in the world, etc., etc. So that was the realization within my Intel world and then I left for the Whitehouse and we were actually studying the future of engineering in the United States. We graduated about 130,000 engineers a year, total, and you overlay that with China and India, who produce a million each and the typical American says, “oh, but our guys are better.” 

JEFF: [laughing] Even just that law of averages, it’s a going to be more competitive when you have more people.

ANDY: Exactly right. Even if you’re like, great, our guys twice as good, or we’ll just say even five times as good, so what we were looking at in the Whitehouse was, why would the next Silicon Valley be in the U.S. when we have this overabundance of engineers remotely. So, I kind of put those two pieces together and my brain was like, okay guys, everyone’s job is in the Cloud, even what we’re doing here is so different than what we would’ve done 20 years ago, so therefore the jobs are in the Cloud and they’re going high skill and, oh by the way, there are great people everywhere so you got to put those two pieces together so over the next 20 years you’re like, Guys, my kids (and I’ve got two little girls, a 10 year old and an eight year old), their notion of going to work in an office, they’re like “Why would I ever do that?” I just click a button and that’s my job and I could do that from anywhere and I believe that has tremendous impact, not only on the individuals but then as entrepreneurs your ability to fire up teams and get up and going really fast or enterprises and be able to harness the best people in the world completely changes.

JEFF: Yeah. It’s a different dynamic. (10:50) I really like this idea, it’s one that’s not brought up around the kind of conversations that we’ve been having on this podcast for some reason, but, this parity with Cloud data. If your data lives in the Cloud the output of your work is living in the Cloud and we’re all in the Cloud ourselves. We’re working in the Cloud to create the work in the cloud. I think a lot of that is oftentimes thought of as when we’re breaking it down to data, we’re dehumanizing it. But this is the really interesting thing about this work so often is, we’re actually bringing humanity into the Cloud, the culture and connection, because it’s really hard to do the work without that human factor. Otherwise, we just hand it all over the artificial intelligence or less [laughing] artificial intelligence and there we’d be. 

ANDY: You’re exactly right Jeff.  The interesting part is when you start thinking about Cloud teams you start then completely changing the way that you even think about how wages are set, for example, or where people have to go to go get jobs. You can start using the Cloud to now deliver jobs anywhere around the world, where people are great. As long as you have a great connection and you can communicate and what have you, then all of a sudden, I can deliver you a job as opposed to making you up and move and come to my city or zip code for the job, I can deliver you the job. So that completely changes, and location becomes less and less important. The other thing that actually becomes pretty interesting over time, and we haven’t seen a lot of this, but we do this across all of our firms is, you get what you call a Cloud wage. In that, if you look at wages nowadays, they’re set hyperlocal; what that job developer makes in Silicon Valley is different than what somewhat makes here in Austin, Texas, is different than what someone makes in Rio De Janeiro, when in reality if you start saying, location is irrelevant, all those guys are  doing the same job, and why are they all getting paid differently? So, I believe that the world actually normalizes to this market clearing Cloud wage where no matter where in the world you are, you actually get paid the same amount, and that is a paradigm shift that I think will dramatically change HR practices  and all the ways you think about work, and it will have amazing impact to a lot of places around the world that have these amazing people but just for whatever reason they’ve been largely exploited over the years.

JEFF: It is the ultimate globalism, and it [laughing] comes with all of the pros and cons therein. It’s really exciting in that it’s ultimately fair based on the skills that people can offer and not necessarily where they live or the politics therein. But at the same time, it’s a little scary and we’re still getting around at the Yonder conference that I’ve run and now Yonder Circle where we get together leaders of remote teams and fully distributed companies, so often the conversation comes down to what’s legal? [laughing] To some extent what’s legal, theoretically at least, the laws are based on ethics, so it’s to some extent what’s ethical but there’s oftentimes the laws and governments  certainly aren’t keeping up with the technology, even the philosophy around all of this.

ANDY: Exactly right. I love your view on the ethical side of it. If you think about it today, even the way the laws are set up, people largely think about going remote or going international as a cost reduction. “How do I get that person in India to do this job for $2.00 an hour and whatever else it might be?” In a Cloud world, again, that completely changes.  Why shouldn’t people get paid what they’re worth versus where they happen to live? In reality you think of your AWS servers in the same way, whether you’re getting EC2 here or there, your expectation is that you’re getting a great product and it’s infinite scalable and you’re paying a fair price for it, no matter where in the world you are. So, that notion of ethics and worker protection and things like that, all of that comes into play from an  exploitation perspective, but if you’re able to deliver folks around the world that are willing to work hard and objectively measured, then you can get around a lot of those ethical dilemmas, because I think you end up raising the wage rate of people around the world.

JEFF: But, historically, the problem around finding skilled people around the world was an issue of trust. We establish trust oftentimes, historically, evolutionarily we assess trust by sizing people up. You stand with them and look them up and down and think, can I trust this person? And there’s inherent, all sort of negative human behavior there, racism and prejudice and thing like that, that might come in. So, it’s really interesting and neat to think  about judging people more based on the results, the actual output of their work and not being so focused on the who of the work, but even sometimes the methodology and the what. We’re not defining hours and making people sit at a desk and a lot of that stuff. (17:12) Talk to me a little bit more about the trust aspect of that because so much of this India outsourcing, what used to be a shorthand for low quality, cut corner work, where price was more of a concern than quality, and stuff like that, I’m not sure that’s a true assumption anymore. It certainly comes with a certain amount of prejudice. We’re deciding ahead of time that the work is not going to be good, and becomes, to some extent, a self-fulfilling prophecy of companies just saying, “We’re only going to pay five dollars an hour and we expect maybe eight dollars an hour worth of quality.” (18:04) Are you finding other ways that we can start to build the trust for hiring people far away and ultimately building that trust? 

ANDY: Trust is one of those things that is misunderstood. There are a lot of less than trustworthy people out there around the world, particularly when you say there’s seven billion people in the world. You can’t trust all them. Therefore, how you hire matters and then also how you manage has to completely change. The good news is the Cloud helps in both of those. On the first one on how you hire, the good news is now, particularly in the Cloud world, you can actually objectively measure how good people are at their specific  skills. You can now give them various tests on their competencies on that role and measure it and then be able to look for all the things like cultural fit and things like that. Crossover, for example, we have anywhere from 20,000 and 25,000 people a week apply to our various jobs and we give them barrages of tests from cognitive tests, emotional tests to skills tests, to work sample tests, and what have you. We then interview them and then we give them the higher mangers interview and things like that. Therefore, we actually believe that we remove a lot of the biases by going objective with these tests, because we rarely even look at resumes. We certainly don’t look at peoples skin color or where they’re from in that particular case. 

JEFF: Right.

ANDY: We can measure them more objectively versus if you look at your resume your resume format is 500 years. Leonardo DaVinci is actually the guy who invented the resume and though it was more decorated than ours, it was largely the same, it’s just a list of bullets, and you meet people and you get biased and maybe you like the school they went to  or what company that they worked for, or didn’t work for, you get all these human biases in there and it’s terrible versus in the Cloud based jobs you can get more objective than that. But I think on the trust side it really comes on the manage side and this is where working in the Cloud matters, is that, Cloud by definition you produce tons and tons of data while you’re working. The typical cloud worker produces about two terabytes of data a year and believe it or not most of that data is thrown away.  What application is in the foreground, what’s in the background, who are you collaborating with, what type of asynchronous work that you’re doing, etc. etc. Two terabytes is roughly the size of a college library. You think about most performance reviews, even the non-remote performance reviews, you’re getting together once a year, once every six months and here are three things that you did well, things you didn’t do well, it’s super data liked, versus in a Cloud job, now you can have tons of data and actually bring that forward into how they’re actually working.

I believe that the manager of the future is actually a bot. The bot is actually going to give you suggestions on “here’s how the best people work and here’s how you’re working and maybe these are different things that you can do to go tweak that.”

Then, through that you can also look at all the fraud.  If anyone’s trying to cheat the system or steal certain things, or whatever else it may be, you can get those sensors in there. I believe that these folks that are around the world, they will have a different sense of trust and the measurement element of it because of the fact that, again, you’re taking advantage of the fact that you can do it from anywhere. I believe that entire paradigm changes but I think that the Cloud has advantages on both of those to go and create trust, and we’re in that tweener time period right now, where we’re trying to take the mentality of non-remote and apply it to a remote world versus starting fresh and saying, “Well, what are the attributes of the remote world that are there that I can use to my advantage, and how would I design that scratch versus take my legacy with me.”

JEFF: Yeah. That’s really interesting. (22:32) This idea of starting to clamp down on the fraud. Part of the reason people are hesitant about their trust is because fraud has been prevalent, particularly around these work from home schemes. [laughing] Growing up in the United States there were  these things stapled to bulletin boards and hammered to trees, “Work from home. Ask me how.” It was usually some sort of pyramid scheme but then even these outsourcing things where the team was kept anonymous and behind a wall. It was this acknowledged mechanical Turk situation.  (23:20) I wonder when we think about fraud, I think of the medicine show, snake oil salesman in the Wild West. There was a need. People needed medicine. [laughing] People were dying. They were getting sick. They wanted help and so they were willing to fall for this false medicine or whatever you’d call it.  People want workers to help them. [laughing] They want help in this way and so historically there’s been some fraud about this, however, you don’t find snake oil salesmen these days because there’s a prevalence of actual real medicine. I think maybe it’s just a maturing of the industry instead of needing to do this smoke and mirrors kind of work overseas that we can actually start to mature the market and get real people doing real work. We’re already starting to see that. I think it just hasn’t been fully recognized.

ANDY: I agree with all that Jeff. And I believe the transparency is a big thing. The snake oil guy, he was pulling out vials of random things, there was no transparency or what have you. 

JEFF: Right. Exactly. Don’t ask. Don’t ask.

ANDY: Here’s all the ingredients and what have you.  The marketplace dynamics will weed out the bad players and the faster you can weed out the bad players obviously the better off you are, but the fraud will always continue to be there. I think if you are managing remote teams without massive transparency, you’re setting yourself up for massive fraud, and you have to be okay with that level of transparency and your people have to be okay with that level of transparency. If they’re not, you don’t hire them. It’s as easy as that. There’s so many tools nowadays that can actually measure a lot of this. Trust is one element of the transparency, but again, that real time coaching is the part that matters the most. At the end of the day the fraud players are still going to be a small percentage. What you want is, how do you make your teams better. How do you get all this information that is absolutely reducing the fraud, but giving that to people so they can get better and better and better? The example I give often is actually athletes. I feel like all the best and professional athletes out there, there’s all these data sensor networks that are measuring the angle that they’re releasing the ball or their swing plane or whatever else it may be, and they are using that data to get better and better and better.  It’s one of those, that we, for whatever reason in the business world, we don’t do that. Despite the fact we have longstanding there, why are we not using that sensor network to get people better and better? I think we will, and I think we’re just on the cusp of that also where the best people will want to measure themselves. Like, “How do I get better? Give me coaching.”  How do we do that? It just also happens that you can get rid of the fraud element of it also along the way if you do that.

JEFF: Yeah. To some extent historically there’s been diminishing returns around what we think of as productivity optimization. That the more optimized the team becomes the morale starts to go down, and people leave. You end up with turnover and then that cost money. I think what we’re learning over time is, zooming out a bit and including morale, it’s really difficult for people to be productive if it’s sucking the soul out of them, that maybe we can find an optimization of both soul and productivity. 

ANDY: [laughing] I find that you want to automate away the low value tasks that people do, and we all have it. If you look at any typical person that’s is making 200 grand a year or whatever, there’s some percentage of their job that’s like ten dollar an hour work, that that person is not getting enjoyment on and it’s a waste of not only corporate time and what have you, but that persons time spending that. Finding those and eliminating those is actually where a lot of the automated issue comes in. I’ll give you one example. I’ve got account managers within Crossover that work with hiring managers, understand their needs and give them the candidates and what have you. I wanted them to be spending fifty percent of their time or more talking to customers, talk to the accountants. That’s how you know their needs. But when we measured it, they’re only spending about ten percent of their time with customers.  I’m like, “Guys that’s not enough.” I’m like, “What is this other eighty, ninety percent of your time?” They’re like, “Well, Andy, we look at it and it’s in Google Sheets and I’ve got to pull together this information and be able to share the sheet with the hiring manager” and yada, yada, yada. I’m like, “Okay, that’s a low value task,” and as a result of that they couldn’t talk to their customers as much. I’m like, “Well, why don’t we just automate a bunch of that?” So, we’ve made it an aside where they just had to click a couple buttons that automatically shares with the hiring manager, then they’ve got the list of people and what have you, and that dramatically reduced that eighty, ninety percent of the time that they were in Google Sheets. It didn’t go to zero, it’s still thirty percent of the time, which then enabled them to spend more time with customers, which ended up being better for my business, end up being better for them too,  because they wanted to spend more time with customers. So, it was better for everyone. It’s that type of automation, it’s hopefully not soul sucking but it just adds to where I want them to be spending their time and where their skillset is, versus banging away on Google Sheets. 

JEFF: Right. (29:27) It’s been my experience, and I’m curious to hear your take on this, that that transparency ultimately needs to go both ways. As the employees are being transparent in their processes to management, that management in the company also needs to be transparent to the employees, primarily to provide some context. We don’t have those visual, non-verbal cues that we get from walking into an office, “ooh, the company’s doing really well, we’ve got fresh cut flowers today,” or those kinds of things you need to be more explicit about if you’re managing a remote team. Also, ultimately, remote workers, there’s a certain amount of managing yourself, even if it’s just reminding yourself to sit down and start typing at the keyboard. It’s difficult for people to manage themselves when they don’t understand their context within the company. 

ANDY: Dead on. I agree. That transparency goes both ways. There’s a great book that came out by Kim Scott called, Radical Candor.  I don’t know if you read it or not.

JEFF: Yeah, I’m familiar with it.

ANDY: I love it, because she had this x,y axis and though x axis was challenged directly, and the y axis was cares personally.   So, at the top right is where you want to get to which is where you actually care about het person and then you challenge them using this data to challenge them but everyone is super clear on where it’s coming, but you care, you want that person to grow, you want the organization to grow versus if you’re at the bottom right [laughing] which is where you challenge directly but you don’t care. She calls it obnoxious aggression. Then the upper left is when you care but you don’t challenge, it’s called ruinous empathy, and then the bottom left is when you don’t care and don’t challenge, and it’s called manipulative insecurity.  But that level of transparency matters both ways. It’s through that data that you can actually apply that. I grew up underneath Andy Grove, at Intel, and he had what was called constructive confrontation, which is two words that typically don’t go in the same sentence together, but it was great, because we at Intel knew that we could challenge the idea aggressively. Literally, we’d stand on chairs and scream at each other about the idea, but we always knew the rules of engagement where you could challenge the idea, but you never attacked the person. Then we’d all go out to lunch afterwards and what have you. I believe that the remote world has that opportunity to go do that with data, but you have to pull that in.  In our companies we have this notion of Mother Theresa and Spock, where if you think of most companies while people are working, they are super Mother Theresa where they are soft with the people and it’s really touchy feely and not really being radical candor. “Oh, you’re doing good, but I like that you do whatever,” and then eventually the manager gets frustrated and like, “Okay, here’s your two weeks, you’re fired, get out of here.” Right?

JEFF: Right.

ANDY: And it’s very much Spock at the end. We try to invert that, where we are actually Spock while you’re working. “Here’s a bunch of data, we’re going to challenge aggressively, we’re going to talk about it, and you could challenge us.” We go back and forth and what have you, and for whatever reason if someone is in my role or whatever, then you do Mother Theresa on the way out. People are people. If they don’t fit, try to help them with another role. If they need four weeks to transition out instead of two, give it to them. They’ve got families and lives. We believe that it should be inverted, it should manage under this super data centric model where it’s very direct and we think that is actually how you lead the companies through success. I believe in the remote world where you have this data sensor network you can do that both ways. 

JEFF: I’ve been finding myself referring back a lot to the book, The One Minute Manager, recently which is from the seventies or eighties. It’s classic management book.  The picture of the book is the manager sitting at his desk with his feet up on his desk, twiddling his thumbs, and waiting for the need to manage because he has done such a great job of helping his team to manage themselves, then ultimately realizing that your job as a manager is managing expectations, or at least letting people know what’s expected of them. That’s a Spock process. That’s saying, “Hey, here’s the data. Here’s how you are matching up against what we need the data to be,” and I think it allows you to be Mother Theresa at the end and say, “I care about you, but let’s be honest, [laughing] you weren’t matching up. It’s documented. I’m really sorry you weren’t able to meet it, or match it, or whatever.” I think the bad management is when employees feel like it’s personal. 

ANDY: Exactly right. Or, when the employees feel like they’re surprised. 

JEFF: Right.

ANDY: You’ve given out this soft message this whole time and they’re interpreting it as, oh I’m doing great. Then all of a sudden, you’re like, “you got two weeks left.” They’re like, what the heck just happened?

JEFF: Right, and they immediately go to, “I guess you just don’t like me, then,” or “You keep moving the goal post.” It’s like, no, no, no, we got to be very clear where the goal posts are [laughing] and what it takes to get there. 

ANDY: And unfortunately, management style and communication between cultures change dramatically too. Obviously if you look at the U.S., it was built as this melting pot, so we have to be very direct at what we say versus Asian cultures, like Japan. It’s been the same language, homogenous, for thousands of years so it’s all about what you don’t say. Unfortunately, as managers we tend to forget that in that U.S. managers do positive, negative, positive, when it comes to feedback. 

JEFF: [laughing] We call that a criticism sandwich.

ANDY: Exactly right. “You do good over here; over here you need to work on that; but you’re doing good.” But some cultures are the exact opposite where it’s negative, positive, negative. “Hey, I need you to really work on this over here; over here you’re doing okay; really need you to work on this over here.”  So, you could imagine the U.S. manager that is doing that sandwich and you get another culture that does it the exact opposite when and literally they’re trying to talk to each other, that they may as well be speaking a different language. [laughing] 

JEFF: Yeah.

ANDY: That’s where data matters. If you have data and everyone is transparent about it and everyone can see where they’re at, then there’s no surprises. Just like give people the data. There’s no reason not to, then everyone knows exactly where they stand and then some people can get coaching at that point. Even better, if you as a manager, can help provide the coaching and the road maps and the playbooks on how to get better.

JEFF: (37:06) Let’s be honest, managing is not a science; it’s more of an art. It’s unclear how to be a manager sometimes and even how to measure how your people are doing. Obviously, there’s all of these OKRs, KPIs, kind of things we’ve developed over time, but they’re just built around data. “Hey, let’s agree on the data so that as a manager it can be clear to me whether my people are doing well or not,” and to know that it’s not personal.  

ANDY: Exactly right. I find that most managers, and particularly important in the remote world, they’re not clear on what the job really is and how it’s measured.  For any given role, what is the one metric of success that job is either succeeding or not succeeding, and unfortunately managers don’t define that. As you mentioned, if you are remote and you’re not quite getting the little nudges along the way to help you find that path of what is successful, then all of a sudden one day occurs and you’re like, you just realized you’re not meeting the job and all of a sudden, you’re fired. That’s dead wrong. I find that in the remote world, you have to be even more diligent in defining the role, being very clear on what that metric is, and ideally automatically measuring that and then providing that feedback on, ideally even a daily basis, on how that is going, but at minimum doing it on a weekly basis so people can see where they stand, and again that’s very different than the traditional old school management, of just walking around the hall. 

JEFF: Yeah. I’ve said it before, I’ll say it again, remote work is ankle weights for management. These are all great practices and the stuff that we’ve been talking about for the past five minutes you could apply to any company. It’s just that much more important and ultimately mission critical in remote work, to get it right. But it’s right for all management. [laughing]

ANDY: It is, because at the end of the day it’s about finding great people. Being able to spin up those teams quickly. That’s going to be critically important to all startups in the future and certainly all companies where, the analogy I often given is actually a football analogy, where if I were to assemble a football team here in Austin, Texas, there’s two million people here, so it’d be a good football team. But if I were to expand the denominator to thirty million people in Texas, my Texas team is probably going to beat my Austin team, and if I expand the denominator again to 350 million people in the United States, no controversial here in Texas, my U.S. team is probably going to beat my Texas team, and then certainly my U.S. team is going to beat my Austin team. But we as managers don’t think of our own squads the same way. This is your team. Who do you want on it? You want the U.S. team on it? Or even going beyond that, rest assured if I assembled a worldwide team of the best football players, my Austin team’s going to get crushed. It’s not even going to be close. So, you’re like, guys why wouldn’t you want that on your team? Why would you not think about that being the talent that you want to draw from, and by the way if you can do that in 24 hours and assemble that team with the best people around the world, then holy shit, that’s like another whole ballpark versus you having to choose from the best people in your zip code and it takes you six months to do. So, this is going to happen. This is happening. I believe, similar to where it used to be in the nineties, where you’d go raise a bunch of money to have a big server closet and now, of course, there’s no one  that ever does that. You just go to AWS and call it a day. 

JEFF: [laughing] Right.

ANDY: People will do the same thing with teams and they just haven’t quite got there yet. Trust and culture building are the two elements that have to go hand in hand. We talked a lot about trust, but then on the culture side of it, you have to be able to bring these people in. These have to be part of your team. You have to have that same equivalent of you walking around the hall and being able to bond with people, because it’s really building that team and having that culture is what then makes those individuals a team.

JEFF: Absolutely. You need to be intentional, proactive about that process because it doesn’t happen by default when people are all working from home. However, when you are so intentional and so proactive, you’re really on the right track to nail it.  (41:41) I don’t know how well this scales so I’m curious to check in with you. You’ve seen larger, larger companies, the people that we talk to on this podcast, we’ve certainly had people with teams of five, six thousand people but they tend to be in the hundred-person median point, but they tend to have this amazing culture where people feel really connected. They really have a sense of this peripheral view of what’s expected of them, what the goals of the company are, what the mission and vision and all those things are of the company, how management works, what it takes to advance in the company, all that stuff, and it tends to be great all around. I feel like that’s a result of both the transparency stuff that needs to happen but certainly the intentionality. (42:41) Talk to me about your perspective on all of that. I think it’s perfectly reasonable if it doesn’t [laughing] scale as well to larger companies. We certainly don’t expect that when we go work at Wal-Mart or something. I’m curious to hear your perspective on culture at scale.

ANDY: I actually believe that the large companies spend more time on culture. If you go walk around any of the Fortune 500 halls, you’ll see their mission statements on the wall, people walk around with badges with core principals or whatever else it may be because at a certain size you realize, unless people fundamentally understand the values and understand the culture, they’ve got to make decisions on their own that are aligned to that, and therefore,  you can’t be on every single decision, and therefore you have to put the right framework in place. I find it’s actually more intentional the larger you get than small. I find that in the remote world though, you have to do that again in a different way. It’s one thing to put a bunch of bullets together on here’s what we believe, and I’m not downplaying that, because that’s obviously important, but culture is actually what you do on a day to day basis. It’s the cognitively hard problems being solved by these people that are super dedicated and can really go out there and work together, and they know that they’ve got each other’s back and they’re going in and being challenged. This is where remote work you have to think in a different way in that because a lot of it is done asynchronously and because you don’t have the in-person affect, the question is how do you recreate that in-person type of feel? I think this is actually where I love Sococo, believe it not. At the end of the day all these communication tools are great. Zoom is great. Slack is great. But they’re communication at the end of the day, they’re not building culture.  

For those that don’t know what Sococo is, basically think of it as a virtual office where you can look at your office and see people virtually sitting at their desk, and you see people that are huddled together in the conference room, or you can knock on peoples doors and go in and say hello, there’s a water cooler or you can chat there. And, it creates this really interesting mental framework in your mind where it feels like even though you know that those people huddle around that table, my engineering team all huddle around that table, these folks are three, four, five, six thousand miles away from each other but they feel like they’re next to each other. I can actually just walk in and chat with them. It’s so much of a different perspective then, “oh, they’ve got a little green dot next to their name, let me go chat with them,” or “let me jump into that channel.” Those aren’t natural culture building things. The natural culture building thing is like, “oh, this person just showed up to work. How was the weekend?” You’re able to have those types of conversations using video and what have you, but seeing them virtually in a space, I find is the missing key for a lot of these remote teams, to be able to pull those people that are remote into an environment that feels like an office, but better because it’s infinitely scalable and it has those same affects. Your brain does this really interesting thing when you’re in those types of spaces. So, I literally couldn’t be more excited about Sococo. I’d give up Slack before I gave up Sococo. It is that important to building culture and making people feel like they’re together, than just really having that sense. I believe it can be done, and I believe it can be done remotely, and I believe we have to collectively figure it out, because that is literally the single most important thing that we got to go do to be able to pull all these teams together. 

JEFF: It’s interesting because that Avatar based stuff is historically, at least, or dominantly has been videogame fodder. So, it’s easy to look at that from a buttoned-up business perspective and roll your eyes and go like, “that’s not productivity” but it’s really interesting to see the patterns that you fall into around this Avatar based communication. You wouldn’t think, “oh, I’m not really going to be able to.” But maybe it’s that tapping into the same stuff that the gaming stuff is tapping into? You kind of fall into this “Well, what would I say to a person in real life?” Here we are with this substitute for real life, let’s have a conversation as we would have in real life.  It pretty quickly breaks down some of those psychological barriers that you might have if you were to fall into a more traditional business looking communication method; maybe even Slack or certainly a phone conference or something like that, that we’re so conditioned to know how to run a meeting that sometimes we forget to make those more human cultural connections. 

ANDY: Dead on. I believe that overlaying that with actual high def audio and high def video matters. I’m not a big fan of just two Avatars talking to each other in this second life type of world. I’m actually a fan of two people, literally, like it happened this morning. Someone knocked on my door and I let them in. They came in and we fired up a Zoom meeting through Sococo and we had a conversation. It was a quick, two-minute conversation about what occurred yesterday as well as what we’re going to do later to go watch the Astros hopefully win the World Series. That type of thing doesn’t really occur in Slack. 

JEFF: It doesn’t occur in Zoom. Who has a two-minute Zoom call? After you’ve gone through all of the formality of setting up a Zoom call, most people will feel obligated to do a half hour or fifteen minutes. Well, let’s put together an agenda for our call, but that’s not how real-life works, right? It’s the popping your head in and just checking in. “Hey, I’m just checking in about this thing.”  

ANDY: It is exactly right. It’s the equivalent of someone coming and knocking on my door. It’s like, “Hey, let’s go to the game tonight.” “Okay, great. Let’s go do that.” That’s what helps build the culture. In this particular case it was going to an Astros game, but those type of informal, quick, little conversations and what have you, and really helping each other out and feeling like you have some place to go, because sometimes you literally can be on an island [laughing] when you’re doing your remote work, therefore your ability to be able to navigate and who’s available and things like that, you want to make it feel like you’re actually in an office. Maybe in the future you are in an office. Maybe you got a VR headset on or something like that and you’re virtually walking around or whatever else it might be, but that is so key in making this remote world feel like your office. I believe that’s actually what’s going to bring a lot of managers around where they’re like, “You know what, that’s cool. Great. They’re not in my office but they’re right here in their office right there, and I can knock on the door and I can see them. It builds trust. I know that they’re there.” All that starts bridging the gap and it’s so important to managing teams.

JEFF: I think a lot of people are comfortable with that one to one translation. Maybe it’s even that Sococo to one extent becomes a transitional technology to help people. I think about the early web. I started doing web development back in ’92 or ’93 before anybody knew the web, and it was all AOL and CompuServe and stuff like that, but it seemed like every single website they were like, “We need a picture of a library on it, and we also need a picture of the store.” It was like let’s make this so people can relate. Let’s take real life, a little village, and put it online, and eventually later as we got through the nineties, we’re like, it’s a website. We can get our heads around that now. When I looked at Sococo I was like, we’re not in an office together, but there is so much of this. It takes a while for humans to evolve. How do we do it? I know a lot of managers who are interested in making that transition for their company, themselves, to remote or just their team to remote or starting to hire some remote people, they get stuck. How does it work? This is a great model for how it works. 

ANDY: Exactly right. Again, it goes back towards that culture building and it goes back towards that trust too, where particularly managers that are maybe just starting out in the remote world and hiring remote teams and what have you, there’s a certain comfort level where you see your team and they are around the table together. Even though you know they’re not actually physically around the table, but they are, and they can virtually reach across the desk and tack chat people and ask questions and things like that. The way I have mine setup, I’ve got my marketing huddled together, I’ve got my engineering team, I’ve got my customer success team, I’ve got my sales team. I’ve got these desks that they all huddle around and then when I need to go and  chat with all of them, I go in there and open up a channel and we chat. I got to tell you, having managed remote teams as long as I have, even with me, there’s a feeling that you get. You’re like, “Wow, here’s my team. It’s awesome. I can see you.” They’re not just green and yellow and red dots. They’re people, they’re sitting there. I’ve got it set up where it ties in with their LinkedIn profile, so it’s got their faces sitting around that desk and I can see them. From there I can go and do all the typical communication tools, but there is that trust that they’re there and they’re working and that feeling of togetherness. I don’t know if that ever goes away. I don’t know if that’s, “Hey, Andy just because you’re on the beginners side,” I think there’s a human connection that you need to create that way and I think this is a simple and easy way to go do that.

JEFF: Absolutely. (54:12) We’re digging into some really great stuff here. I want to be sure to talk about Crossover a little bit more. Talk to me about Crossover. How did it evolve? What’s the philosophy behind it? Particularly what can listeners of this podcast learn about and from Crossover?

ANDY: Crossover is the notion of, “Hey let’s assemble these Cloud teams of great people no matter where in the world that they are.” What we do is we literally scour the world with just all these different ads to have people apply. We’ve got anywhere between twenty and twenty-five thousand people apply and we test everyone. We have a super high bar on your recognitive perspective, how intelligent you are from an English competency perspective, because today it’s still business is lodged on English, and then we go into a variety of different skills testing, whether that be if you’re an accountant, we’ll give you a bunch of different accountant tests. Of if you’re a developer we’ll have you code, and then we’ll have you interview. What we do is then assemble those folks into teams and then we basically place them with various customers or largely we use it across the companies that we’ve been buying. We realize that the whole remote work Cloud team is still emerging so we’re like “You know what? This is an amazing set of people.” As everyone knows if you put amazing people in companies, amazing things happen. Go figure.   We’ve been leveraging those guys to go in and buy as many companies as humanly possible and put them into a common set of engineering team, support team, professional services, inside sales, accounting, finance, you name it. We put them all into these teams and make these companies better. We’re buying companies like crazy right now. We’re still hiring people from anywhere around the world, and all the things I mentioned previously on Cloud wage where we pay people the same amount no matter where in the world they are. We’ve got an EVP of product role for example that’s $800,000 dollars and it doesn’t matter if you’re in Silicon Valley or you’re in Bucharest, Romania, you can get the same $800,000 dollars a year because that’s what we value that position to be. As a result, we get the best of the best.  You pay someone $800,000 dollars in Romania you could imagine what type of people you get.

JEFF: [laughing] Right. Buy a castle.

ANDY: Exactly right. You get the best of the best, therefore that’s what we do across the board and we assemble them into teams. Then we have all the data sensor stuff we also talked about to make sure we give them coaching on a real time basis and make sure that we’re eliminating fraud. But our belief is that you can assemble these unbelievable teams around the world in whatever skillset that you need and then you buy whatever companies [laughing] you want and  fuse them into these companies and make these companies great. I’m like, “wow, why don’t we just keep doing that?” In parallel we got a bunch of external customers that’ll realize that too and are jumping on the bandwagon too. We got 4,000 people within our companies and we got another x thousand across other external companies and now we’re just trying to find more and more right people.

JEFF: (57:48) Wow. This is the epiphany for me. This, “you can hire anybody anywhere. You can hire all these great people. We could put together the best company that we could think of,” right? And that’s what I felt like I did with my company Lullabot, just be super visionary and idealistic about the kind of company we wanted to put together and then just put it together with people wherever they live, and it’s interesting to see you basically doing this at scale. It truly is a competitive advantage, and also having a private equity fund you have an obligation [laughing] to the equity and it’s just really interesting to see this happening at scale, but also in a pragmatic acknowledgment because for me running a private company it feels really good, I feel like we have an advantage to be able to sell and be a place with basically zero turnover. It’s really interesting to see that happening where companies are realizing even to the point of you putting together a company that does just that [laughing] sort of help connect people with these talent pools. That’s amazing.

ANDY: It’s been fascinating. We’ve had to learn a ton along the way. How do you run an inside sales team remotely for example? You go talk to the experts, right? They’re like, “No, no. Everyone’s got to be there because you got to make sure they’ll pick up the phone if they call.” 

JEFF: They need to ring a bell.

ANDY: Right. Exactly. You got to go boiler room on you, and you have this leader board, whatever, and you’re like, “no, actually you don’t, right?” Yes, you need to use the right tools like Outreach and others to record the calls and grade the calls and make a script on all that other good jazz, what have you, and you’ve got to have a great manager that can hire remotely. So, we had to figure it out across all of the various elements to run a company. That’s the other thing people think about. “Oh, remote equals engineering.” We’re like, “okay, sure.” But then what about your accounts receivable and accounts payable? What about your treasury? What about your sales and marketing? And what about all the support. All these other positions that you’re like, “guys, if we’re going to run a whole company like this, we got to do it across all, for every single one of them.” You’ve got to write a playback and how is it measured and what’s the rule, and how’s the work actually done? I’m a big fan of going to where the work is to understand. Most managers stay so high level. They’re like, “Oh, I want this thing, blah, blah, blah.”  I go, “Okay, well how about you go to the actual job itself and go do it for a bit?” Like, this is actually the skillset that’s needed. This is actually the calendar that’s needed on x, y, z, and these are the actual tools we needed. I find that if you can’t go do that as a manager and you can’t dive down into where the work is done, then you’re a terrible manager and you shouldn’t manage remotely because you’re going off a gut feel versus actually looking at the data and doing the job. 

JEFF: There’s a certain amount of vulnerability, empathy and agility and flexibility that needs to be there. You can sit down and academically think of what the bet process is going to be and then try to impose that on people, but it could be wrong. It probably is wrong.  

ANDY: It is wrong. Until you get in there and see the work. This is actually what Toyota Manufacturing did so well back in the eighties. They had what’s called the Gemba walk, where unlike the U.S. managers they would just do PowerPoint and Excel and dictate things down to the manufacturing line. The Japanese managers would go down to the line and would have a checklist and go and interview the people on the line and go, “Hey, how do we make your job better?” It’s not micromanagement, it’s looking at the job, and you talk to the guy and he’s like, “you know what? The problem is that the wrenches are over here three feet away, therefore I got to get up every time, grab one and bring it back,” when “oh, by the way we share all the wenches so therefore if that guys using it, I got to sit there and wait until he’s done.” You’re like, “Okay, why don’t we just give everyone the tools and why don’t we put it closer, so you don’t have to get up and then you just got to reach over and grab it?” You’re like, “oh great.” And that increases productivity. So, that level of going to where the work is you have to do remote and  you have to be like, great, let me look at this inside sales role.” Okay great, let’s listen to the sales call. You know what these are the objections that come up. Let’s make sure those are clear. Okay, great let’s record the outreach. Let’s go put that into a sentiment analysis tool in Amazon and understand whether or not the customer and what their sentiment is throughout the call and whether or not they turned from skeptical to positive. All  this amazing data you can do for every single role, but you got to go where the work is. That’s one of our big issues is, ensuring that managers are willing to go do that. Managers they have a tendency to be lofty and high level.

JEFF: “I got all the experience. I came in with you. I was hired for my experience.” Yeah.

ANDY: Exactly right. You’re like, “no, go to where the work is. Go do the job for a little bit and then you have the right perspective.” Then all of a sudden you discover things and you apply that knowledge. You’re like, “Great, this is how we’re going to make it  better for everyone.” Then the low value casts away and etc., etc. So that’s how we’ve been able to build it. We’ve got tons of work to do. By no means have we got it all figured out yet, but I feel confident that if the managers continue to go down and do the work and we can either measure it and then we can even give people coaching that the sky is the limit. I think 10 years from now we’re going to build so many competencies on how to actually do these roles great. Now, you’re leveraging all the best people in the world and you have this coaching and sensor network and manager bots. In what world does that not win. So, I’m like, “great. That’ what we’re building.” 

JEFF: That Toyota methodology as well, when we think about the stereotypical, particularly American kind of starting of the industrial revolution, management style, its adversarial. It’s, we need to impose work on people. They’re not hired to think. Starting to change that paradigm to realize that we’re all in this together. The idea is to be productive and being productive is a pretty good feeling as a human being [laughing], to feel like you’ve got job security and we’re all caring. There’s a certain amount of compassion that goes into it, but that we’re on the same team is really valuable.

ANDY: Dead on. This isn’t Taylorism. This isn’t like, “how do I get these dumb people to go do the very specific things that we need,” and go hit a hammer. When people are high skilled you have to adapt that and be like, “no the best people in the world want to learn to get better.” They have this growth mentality where they’re like, “give me the feedback. I want to know how I get better, because I think I’m pretty good today, but I can get better.” I do very much use analogies of the professional sports. It’s coaching. It’s giving them data so they can get better and better and it’s not just once a  quarter or looking at your MBOs or it’s not once a year looking at your review. Give them all the sensors. Think of the Fitbit. People look at their Fitbit and they’re like, “Oh, I didn’t walk my 10,000 steps today so I’m going to take the stairs.” That leading indicator matters because the lagging indicator of that is just stepping on a scale two  weeks later and be like, “Oh, I didn’t lose any weight.” That’s too late. You want to get it to where the work is done. You want to do it exactly where they can take action and it’s by  getting that data in their hands right there on the spot that actually makes a difference. So, that’s the big thing about setting these metrics. It’s got to be leading indicators, not lagging indicators.

JEFF: And we see that relationship and those feedback mechanisms and ultimately the respect thing happening a lot in those more skilled white-collar jobs, but I think we’re going to start seeing it more on the factory floors; blue collar jobs. Obviously, Toyota’s had that figured out back then. It’s all going towards the same end. (1:06) A question I want to ask you before we end all of this, and I can go on and on [laughing] talking to you, but as a person that runs a private equity fund and in that venture capital realm, where are we at with remote work? I know VC tends to be conservative, rightly so, it’s a very cutting edge technologically forward, but wanting to be safe, this is money we’re talking about, and historically remote work was not tried and true proven thing when you were talking to Venture Capitalists, they wanted to make sure that everyone was in the office and was aligned. Is that changing for you? Is that changing for the finance industry as a whole? What’s your perspective?

ANDY: It’s interesting when you look at remote work trends over time. It’s a big sign wave where there’s a big boom in the late nineties when telework came out, per se, and it rose up and then in the early 2000s, particularly around Bristol Myers and others and Yahoo, it went the other way; everyone’s got to be in the office. Now it feels like  in general it’s on it’s way back, but I’d say that VC and PE are actually two different spots right now. On the PE side of the world I find that it is further behind, particularly there’s PE shops that are looking to buy companies and sell them. They feel everyone has to be there in an intact unit because it looks better for someone else that’s going to buy it. They got an office here in Austin and they’ve got 150 people here and that’s where everyone is at. So, there’s this packaging effect that I think that they start feeling uncomfortable about. We’re like, “they got three people here in Austin, but they got 150 people spread around the U.S.”

JEFF: There is this, again, sort of innate human value in being able to walk into a room or building and say, “this is the thing.” This is what we’re buying. We’re buying this building with the people in it and if you don’t have the building, if you don’t have the people all assembled into one place, it’s a much more abstract thing, but arguably so is any SaaS. 

ANDY: Exactly right. 

JEFF: Or a Cloud service by definition is fluffy. 

ANDY: Dead on. I feel like PE is pretty far behind there. I feel like VC is also far behind but not quite as far because VC, particularly in the bay areas, is starting to run into the talent availability problem. You see more and more now where they’re like, “I still want you to have your core team in San Francisco here, but feel free to have some other people remote, because I care more about you actually growing your business.”

JEFF: We can’t afford to pay everyone $600,000 a year.

ANDY: Exactly right. They’re like, “you need to get your product up and going so go hire those people and maybe someday you’ll move them here.” But it’s still not to the point where I believe that the VC and the funded companies of the future will be one gal and an idea and an end number of Cloud teams, and they’ll just assemble it like Lego blocks and be like, “there’s your company,” and you’ll be done in a week and you can try it out and get your MVP and you’re rocking and rolling. I believe very much like the server world, where again you’re like, “right now just go fire up another AWS.” And obviously the AWS’s are still different. The N4 is different than the R4 and what have you. You still specialize but it is an amazing research you have available. I believe eventually that will be the only way things get funded. You have to have your core team there in Silicon Valley and whatever else and be like, “what are you doing? Why are you paying $600,000 a month, or whatever, for this office space and the four people that you have inside of it?” Get rid of that and just be in the Cloud. It will be a Cloud centric startup world where that will be the mentality and I think it will be looked at as idiotic to not have that, and that all revolves around these Cloud teams and just the speed in the talent level and the lower cost to be able to go do that, will be the competitive advantages and those will be the companies that will end up being funded. I haven’t seen any VC go there yet. There’s still all these other concerns about trust and IP and culture building, that they haven’t quite got there yet. I think it’s a ways away yet, but it does feel like it’s back on the upswing which is good. 

JEFF: Wow. That’s really interesting. Great perspectives on all of these things and I think our listeners are going to really enjoy hearing all this. (1:10) If anybody wants to follow-up with you, get in touch [laughing], there’s so many possible things, they can start by vising your LinkedIn page just to see all the things you’re involved in, but where should they get in touch with you.

ANDY: Twitter is always a great spot. My handle is @andytryba and I’d be happy to chat. I’m working on a book that is along this line on how to actually do remote management and some of the tips in trying to get rid of the fairytales that are out there and things like that. Hopefully you’ll see that come out soon too.

JEFF: That’s great. Well, thank you Andy, so much. This has been a great conversation.