Toptal CEO responds to criticism

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Toptal’s CEO was accused of not giving options to employees who felt they were entitled to it, even though their legal agreements stated they were conditional. I asked him to do an interview, expecting him to say no way, but instead he said, glad to.

My summary of his response. Regarding investors: I’m not going to raise unnecessary funds just so their debt could convert to equity. Be patient.

Regarding employees: I keep telling people not to work here if they’re doing it for a stock windfall. Regarding his cofounder: Legally, I can’t say anything.

Taso Du Val

Taso Du Val


Taso Du Val is the founder of Toptal, which enables start-ups, businesses, and organizations to hire freelancers from a growing network of top talent in the world.


Full Interview Transcript

Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses. And joining me is, I’ll be fully open with you, a sponsor of mine who was in the news, and I didn’t expect him to be here. Last week, there was this huge article on the information about . . . and the information never has these huge articles that people spread around because it’s a paid site, but I bought a membership just to read this article that everyone’s talking about, about how Toptal, this company that most people didn’t realize how big it was. Even though I’ve been saying they’re huge, guys, pay attention to them. Most people didn’t realize how big they were.

The article in the information said not only are they big, but because they’re doing so well, their investors are not going to end up getting a piece of the company. Their investors who invested in the company for this upside are not getting a piece of it. And also the same thing for employees, the whole idea of working for a Silicon Valley company that’s back . . . Oh, look at Taso just did that thing with his face when I said it.

The whole idea of working for Silicon Valley company that’s backed by investors is that one day you will have an exit, and now, these employees don’t have shares in the company, and they won’t have this mega exit. And so I just sent out a message to Taso saying, “Hey, this has been in the news. Do you want to come on?” And I thought he wasn’t going to say yes so much so that I ignored my email for the whole weekend. I sent this out on Friday, I ignored it for the whole weekend, I come in on Monday, go through my email, he responded like right away saying, “Yeah, sure, of course.” When I respond back to him, he calls me, and we get on a call and he says, “Andrew, let’s do it.”

And so we are here to talk about a couple of things, a little bit about what’s going on in the news. And then also, how did this guy built his company so big that he doesn’t need his investors anymore and apparently it’s profitable? And is he upset that nobody knows how big it is? Is he upset about the news? Is he actually cheating his investors? What’s going on with his employees? The whole thing we’re going to get to do, thanks for two phenomenal sponsors. The first will host your website, right? It’s called HostGator. And the second is a company that I’ve been loving. And I don’t know, Taso, you’ll have to tell me as an entrepreneur if I’m actually communicating this well. I’ve been freaking loving You might want to sign up everyone Toptal for this. It helps me focus when I work. But I’ll talk about those later. Taso, welcome.

Taso: Let’s sign up our investors to first.

Andrew: You should. The one thing, I kind of knew this, people now know this publicly, the company is worth, from what the information talked, about over $1 billion. You seem to own over 100% of it. Are you now a billionaire?

Taso: Well, Michael Bloomberg’s quote, which is “If you don’t have $1 billion in cash in your bank account, you’re not a billionaire.” So by that definition, no. Toptal has not had a valuation yet by any outside institution. That article referenced effectively what some gossip was supposedly.

Andrew: You’re saying it’s just gossip that the company is worth $1 billion? I should introduce with the company is Toptal, it’s top as in top of your head as I say in the ads, top as in top of your head, tal as in talent. It’s an on-demand service that connects high-caliber talent with companies all over the world. Is it at least right that it’s over $200 million in revenue?

Taso: Well, actually, the way that they characterize it in the article is not correct because they made a comparison against Upwork’s revenue, which is gauged on what many people in the technology world would think of as net revenue. And they characterize our revenue based on sales. So you [haven’t 00:03:47] run a comparison right off the bat.

Andrew: Let me be clear about that, what they’re saying is, look, the 200 or so number that they’re quoting includes all the money that your clients pay you, even though a big chunk of it, you payout to the people who are doing the actual work, to the contractors.

Taso: But they also represented that we were one year behind Upwork, and they basically took Upwork’s revenue number, which is a true revenue number.

Andrew: Because it’s a publicly-traded company.

Taso: Precisely, which is really a net revenue number as many startups think about it. And then they compared it to our gross revenue. So there’s an incongruency in the way that they actually did the comparison on the financials. So if you were to ask us what our revenue is, it [wouldn’t 00:04:36] be 200 million, it would be another number that’s lower. We have audited financials, PricewaterhouseCooper and others have audited our financials, and our revenue number is not that high. I’ll leave it at that, for now.

Andrew: I kind of feel like the reason they’re doing that is because when somebody hires a contractor or developer from Toptal, what they’re doing is they’re hiring someone from your network. When they go to Upwork, they’re hiring someone who just happens to have an internet account and is saying, “I want the job.” Right? So there’s more of a connection, but either way, they’re contractors who are not full employees. When we’re talking about employees of Toptal, we don’t mean to developers who companies hire through Toptal, right?

Taso: That’s about right. We represent ourselves as a network or an on-demand service for high-caliber of talent. So that’s a bit different than open freelance marketplace like Upwork is. In my opinion, significantly better. That’s my personal opinion and our clients’.

Andrew: I want to get into what’s going on with the investors. Why don’t we go back a little bit to the founding of the company, and then how you raise money, and then why the way that you raise money and the way you built your company is potentially keeping investors getting equity . . . are investors getting equity in the company? Let’s start with that question then we’ll go back in time and tell the story.

Taso: Can you ask that question more specifically?

Andrew: Do investors currently have equity in the company?

Taso: No.

Andrew: Under any upcoming plan do you see them getting equity in the company?

Taso: It’s a possibility.

Andrew: It’s a possibility?

Taso: Absolutely.

Andrew: Okay, and employees, is there a possibility that they will have equity in the company?

Taso: It is a possibility.

Andrew: Okay, let’s go back to where did the idea come from?

Taso: Okay, so the idea started when I was working with a few different companies figuring out some software development techniques, protect some software, let’s say impetus for the idea was that they were paying me money to write software for them, while I was working with folks all over the world who actually I thought were better at writing software than I was, and they were significantly less expensive. People simply didn’t know about that. And so we ended up contracting out a few developers. When I say we, I mean, I and the people we’re contracting out, should be more specific on that.

Andrew: Wait, let me see if I understand this. Companies were paying you to do development work, and what you were doing was you were then starting to say, “Look, they’re paying me a lot of money because they know me. They don’t know that there are smarter people than me out there. And so what I’ll do is I’ll take some of the money that they’re paying me and contract it out to these better developers who are lesser-known.” Is that right?

Taso: A little different. I was actually contracting those developers to the clients. And so I wasn’t actually taking on the work myself and then contracting it out. I was actually a matchmaker in effect. I was saying . . .

Andrew: From the beginning, you were a matchmaker?

Taso: From the beginning, I was a matchmaker, right, yes. I was developing software, but I was also contracting out folks to the clients directly.

Andrew: Okay, and so how did you get these clients?

Taso: Well, they asked me to write software initially. And I was a software developer, supposedly I still am. And so asked me to write software for them, and I wrote software for them and I said to them, “Hey, look, I’m working with a few folks on side projects,” because I was actually working on another completely different project at the time, and I said to them, “Why don’t you actually work with these folks to be able to further your software development in an even better way?” Now, they were less expensive, I charged a similar rate to what my rate was, much better deal for me in terms of my time spent. And it’s as simple as that.

Andrew: Okay, and you were finding them on other freelancing websites, from what I understand, am I right?

Taso: Well, no, actually. When I initially contracted out the first folks, they were friends of mine from, let’s say, IRC and a few other places. Some were in the Philippines, some were in Russia, some were in Argentina. So I contracted those folks out to different clients, and it was almost the same rate as mine, a little bit less. So the client saved money. I paid the developers handsomely, more than they were getting in their countries. And so it was the win-win-win across the board.

Andrew: But you were collecting the payment, and then you were making the payment to the developers? Got it. By the way, you are aware today because the connection is not super solid, hit record on your computer too, on your Zoom, and let’s see if we can get a good copy from you.

Taso: You’re not hearing me very well?

Andrew: You’re kind of cutting in and out a little bit at times, but if you hit record on Zoom, we’ll get a crisp connection directly from you, and I’ve got another computer backing it up here. Where are you in the world today?

Taso: I’m in Spain at the moment.

Andrew: This is part of the way that you guys like to work. Every time I talk to somebody at Toptal, they’re in a different country.

Taso: We do our best. It’s difficult to travel a lot, especially given the pace of the company. But we make it happen.

Andrew: It’s fully remote.

Taso: It’s fully remote. We don’t have an office, and we don’t plan on having an office. So yeah, that’s how we run.

Andrew: Your LinkedIn profile says that you were the CEO of Toptal, you’re with Toptal since 2010. Is that when the company started?

Taso: Yes, the company was started in 2010, correct.

Andrew: Okay, what was the impetus for actually starting this company?

Taso: Well, I thought we just went through that.

Andrew: But you were just doing this nicely on the side. At one point, you did you say, “You know what, I’m going to turn this into a company. We’re actually going to do this formally, companies will come to me, I will get them developers, and this is going to be a thing, not just this almost side hustle”?

Taso: Sure. Well, from the first contract, I really felt like it was a pretty full-time thing for me. So I would say since the first contract that we had, that’s probably about right, yeah.

Andrew: By the way, I’ve known you for years, not super well. I have always admired what you guys have done with the company, and I’ve always been a little bit scared of you, Taso. And the reason I’ve been a little bit scared of you is you’re like super friendly, live anywhere you want, but all business, to the point where you guys invited me to moderate a panel once. And you were on the panel, and everyone else on the panel says, “Yeah, we want to be open with everyone in the world about how we do things.” You were the only one who said, “Actually that doesn’t make business sense. I’m not going to play nicey here and say that we’re going to be open about everything.” And so how does that sit with you, that analysis? I feel like that is you, Taso, that you are not going to do that Silicon Valley nicey, we’re going to be open and everything’s going to be happy-go-lucky.

Taso: Well, can you describe open? Because I have read Ray Dalio’s “Principles” and I can’t imagine a person giving radical transparency and radical truth more than myself. So I run the company through effectively principles. I believe in recording effectively every conversation, ensuring that everything’s in writing, sharing those conversations, sharing those recordings. Precisely, so getting into situations like the ones that we have been alleged to be in.

Andrew: Any information where they . . . okay, and that’s where we’re going to the team and their expectations according to the information article.

Taso: Could you drill down on that openness component? Because for me, I would like to know what you mean by that more specifically because I actually find . . .

Andrew: I’ve interviewed many entrepreneurs who when I asked them what’s your revenue, are super open, here’s what the number is, here’s what the expenses are, right? You guys are not big on that.

Taso: No, that part, absolutely no. We’re not big on revenue numbers unless we absolutely need to. And there’s a logic behind that, right? If you’re consistently giving your revenue numbers out, then nobody’s ever interested in what your revenue is. And so there’s [inaudible 00:13:21] be a story by any interesting journalist, other than maybe the information, that will give you a hook into something that you might want to be a part of. So if your information, let’s say, is just out there quarterly and it’s not some sort of exclusive nugget that a journalist can get ahold of and . . .

Andrew: You’re saying that at one point, you can make a splash by saying, “Here’s our revenue.” And by constantly revealing it, you lose the opportunity to make a splash.

Taso: 100.

Andrew: Have you ever revealed it publicly?

Taso: Yeah, actually we used for those specific purposes, we were in a few prominent publications where we did release revenue numbers and it was successful.

Andrew: I’m also reading your body language when I’m asking you questions about the past, and I think I’m picking up on discomfort over even being asked all this stuff, that you’re not someone who’s like looking to get in front of a camera and talk about every single thing.

Taso: Well, given the context of the interview, it’s not the most comfortable topics.

Andrew: You don’t know where I’m going to, right?

Taso: Yeah, well, I have an idea.

Andrew: So let’s get into the investors then. All right, so this idea was starting to take off, and then at some point, you said, “All right, it’s time for us to get funding.” What led you to get funding?

Taso: Well, we wanted to experiment with more marketing ideas, with more new hires, so to speak, hire a few folks, see if they could do business development. It’s actually pretty typical. And so it wasn’t something, I would say, very novel in terms of the reason that we wanted [inaudible 00:15:08] we wanted to hire software developers, hire some business development folks, and test some marketing initiatives to be able to grow the company, pretty standard.

Andrew: And first funding came from an angel?

Taso: Well, the first funding was two individuals, and that was the first, I guess you could call it small syndicate. It was kind of a syndicate of syndicate if you want to characterize it as that, but in essence, if you want to characterize just the whole amount of funding that we got, it was probably some were all done in 2012.

Andrew: 2012, who were the first entrepreneurs who came in? Was it Adam D’Angelo?

Taso: Adam did commit. I’m not sure if he was the exact first person. Yeah, he did commit. I don’t want to get any fact remotely wrong on this, that’s in part I’m a little, let’s say tense because all the facts are actually very important in this conversation.

Andrew: Okay, you’re saying, “Look, I don’t want to get wrong who committed first, but they all put in money at the same time.”

Taso: Effectively, all somewhere around 2012 because there are many different months where someone put in some amount, another person put in another amount, and so forth.

Andrew: And this is where we kind of get into the seeds of what the information talked about, where the investors don’t have equity yet. What was the structure?

Taso: Well, we did a convertible note. So the financial instrument we used was a convertible note, which is effectively a loan that upon certain conditions may convert into equity.

Andrew: What are the conditions?

Taso: Well, we don’t talk about those conditions publicly, I mean, they’re financial documents.

Andrew: The common one is at the next round of investment, their loan becomes equity under certain . . . actually, at the next round, that’s it, and at a certain valuation with a certain cap on how much they could get, am I right?

Taso: That’s a typical version of it. In our case, you could say there is a version of that.

Andrew: There’s some version of that where essentially the convertible note means that loan that they gave you will become equity and the business will become a share of the business under certain circumstances. And the most common circumstance is another round of funding, another set of investors who come in and price the company.

Taso: Well, I’m not a convertible note expert. I’m not sure if that’s the most common one, but it is one that I’ve heard of before, not just ours.

Andrew: Okay, all right. And so you had this money, how much was it again, roughly?

Taso: Actually, say it was approximately $1.5 million.

Andrew: 1.5 million, okay. Not a huge amount, but for convertible note, it makes sense. Then something happened to your company that kept you from needing more money. We will talk about that in a second. First, let me persuade you or tell you about You tell me if this makes sense. Here’s your thing. Sachit, who is the guy who sells ads at Mixergy, he says, “Andrew, this guy at he wants to advertise.” I said, “Okay, great.”

My issue with for a long time is, what, I listen to some music and it helps me focus? I don’t know, and even if I do, I don’t know about you, Taso. But I always think about what’s the business angle here? If they do it, then maybe Spotify is going to copy them at some point. And I just dismissed the whole thing because maybe Spotify could copy them and why would music make me focus? But at some point, I said, “You know what? I’m actually going to try this.” And I love in San Francisco to go sit outside in the summer, get a little bit of sunshine, and work on my iPad. I’m not a computer person. What do you use?

What’s your main device? Probably a Windows machine or a Chromebook?

Taso: I use a MacBook Pro.

Andrew: Ah, okay. So I’ve been loving the iPad. And so the problem with being in beautiful environments is sometimes people will come to these beautiful environments, and they’ll just start yapping away, or they play music in these beautiful environments distracting me from getting my work done. And for a long time I thought if I could just focus a little bit better, if I could tune it out better, if I could play music louder, if I could put stuff in my ears, I could focus, or why don’t I go back to my office?

Going back to my office was not as inspiring as being outdoors. Being as outdoors, no matter what I did, I couldn’t get focused. I finally said, “Let’s try this I hit play on it. And for some reason, something about the way that they play their music, the way that . . . it’s not even music. It’s like these waves, you almost visualize them in your head. I started to get into the flow. And this sounds like the most bull BS stuff, except I tried it and it works for me. And it’s not just me, it’s many other people. And even they did this research on it, and they’re showing in an fMRI your brain is actually more active in this than when it’s listening to music and when it’s not doing nothing.

I started getting more productive. I still was skeptical, and then I finally said, “You know what? Who cares?” Let’s suppose it’s a placebo effect. They got all the science that’s showing it’s not. But let’s suppose [inaudible 00:20:18]. I’m working, I’m getting more stuff done than getting better project management software, better task lists, better enviro . . . boom, I signed up, I’m a customer.

Now, they’re letting everyone go try it right now, including you at If you decide to sign up, they’ll live and give you 30% off. What I’m hearing is the companies are signing their whole team up to be more productive because helps people who are working remotely, stay focused and without distractions. Frankly, even people who are working in an office or working from their home and have quiet are signing up because it puts them in the right frame of mind to get into flow. I freaking been loving it. Taso, I feel like you’re a little bit skeptical about it too. What do you think? Be open with me, yes. I’m like you.

Taso: It sounds a little out there, but you never know.

Andrew: Right, yeah. I’m totally with you. It sounded too either hippish or fake science, and then I tried listening to it. As soon as you listen to it, the thing that it does in your . . . anyway, Guys, tell me. If it’s not right, call me out on it. You guys have seen me dump sponsors in the past, but freaking, hey, these guys are good.

All right, what happened to your company that let it take off? I’ve been saying for a long time, Toptal is big. You get jack coverage, people do not cover you. What happened in this quiet period?

Taso: Well, we learned a fair amount about how to grow a company. We got some critical clients. There were many different elements let us be able to be successful [inaudible 00:21:52].

Andrew: Be more specific. What exactly is going on? I know part of it is external to the company. There’s just a booming market, developers are in high demand, and a lot of hiring job site contractor sites have done well in this market. But you guys have done extraordinarily well. What can you say? I have a feeling you’re not going to tell me the big thing that worked for you because why? I saw your eyes even light up at that. This is why I like to have video on, even though nobody watches the video. Tell me what you can say that has worked for you, for bringing people in.

Taso: Well, it has a lot to do with user acquisition, creating software in a way that’s much more scalable than most companies do it. So one foundational element that we did which I think a lot of companies get wrong is we took a long-term approach, not just to the business, but also to our technology platform. And it’s my belief that that ended up paying off over time, where you had layers upon layers of technology that allowed you to execute a fair amount more quickly than some of the other competitors. And so we had a better software stack, we had significantly better operations, we had a significantly more specific strategy, we had a tight team that was working to be able to execute on that strategy. And so it was a bunch of components mixed together that made up for our success.

Andrew: When you say software, what do you mean? Let’s start with that. What is it that’s different about your process, your software because all you’re doing is matching people?

Taso: That is what our end is. However, for both sides of the funnel and the client, what you need is a really robust software stack to be able to screen them, get them into the pipeline, onboard them, and being able to do that effectively, and really better than anyone in the world is pretty much the most important thing about our business and a main reason why we are so good at what we do.

Andrew: Let me tell you what I saw as an outsider, help me put some more flesh on this. I remember when I first went to sign up for a Toptal to hire a developer, it was a simple form, not a lot of cruft. The goal was then to get me on a call with a matcher, but first to pay money like a deposit or put my credit card in so that you guys were making sure that I wasn’t just looking around.

Once I did that . . . I like that you’re leaning forward, it means I’m onto something, like this is an interesting conversation that we could engage in for a bit. And then you took me to a booking process. It wasn’t like a Calendly or Acuity Scheduling, you created your own booking with the matcher. And then you got me on a call with a matcher, almost like instantly I was on Skype with a matcher. To me, that told me, “This is a company that wants to develop every little thing, including that calendaring system. There’s something about it.” What was it? What am I seeing in that little engagement with your company?

Taso: You’re spot on. So every little component within Toptal, whether it’s our calendar, or our matching system, or our screening process, has been created through software, software that we have created ourselves through literally hundreds of software developers. So we have a team internally, we’re about 200 full-time software developers that are working on our internal systems only that are allowing us to scale. So if you think about that calendar app, that’s our scheduling app, internally, we call it top scheduler. Top scheduler is by my account, these single most advanced scheduling system in the world.

Andrew: What does it do that I can’t get on Calendly? I want to understand like what did you guys have to develop to even get that little thing the way you want it?

Taso: Well, effectively, what it does is it load balances many different calendars so that people can hook into it. It can effectively be a waiting calendar system or a calendar system that does load balancing through waiting and through which slots are available. So, for example, if you have a calendar slot that’s available for five people and you have to choose what calendar slot goes to who for a given client, that’ll do that in a very sophisticated way using waiting, so on and so forth. You get the general idea. But again, it’s a very small component that exist within Toptal. It is developed particularly well. And people often email us stating, “Wow, this is a really well-done scheduling system. What is this?” It’s something we develop internally.

Andrew: Okay, this gives me a sense of your company. Here’s another thing that I think will give us a sense of the company. The person who takes the client call is called a matcher. There’s some kind of competition with the matchers to see who can get on a call with the client first, right? And that sense of competition gets matchers on calls with clients faster.

Taso: Sort of in parts of the company we have experimented with an idea that is similar to that, but yes, it’s in effect, something similar to that.

Andrew: What am I missing with that? Because I felt like that gave me a sense of how the competition in the company is nurtured and encouraged so that you get the best and the most out of people.

Taso: Well, I’ll tell you what’s slightly off with it. What’s slightly off is that in some parts of the companies, have a process where people can claim a certain client or certain talent first, and in other parts, we actually delegate it. So the idea is true in some parts of the company, but it’s in very specific processes.

Andrew: Okay, what did you do to bring clients in?

Taso: The marketing in effect . . .

Andrew: What is the marketing at Toptal?

Taso: Well, I guess you could say it’s a combination of traditional marketing, online marketing. We now have a salesforce that is excellent. We have a really great team, let’s say, that’s working away to be able to do sales, do marketing.

Andrew: Open up a little bit, be a little open about what’s worked. What’s one thing that’s worked that you guys are especially proud of for bringing customers in?

Taso: I would say our ability to convert clients quickly. From them signing up, it’s being able to provide them with talent. I think that’s what people are always impressed by, and our on-demand ethos has sort of resonated all throughout the process. So when you sign up, that conversion rate optimization funnel, which is a part of marketing, I guess one could think of it as it is, it’s really, really sophisticated. So we build all of our own technology to be able to do A/B testing, to be able to test out different mechanisms . . .

Andrew: Meaning that if somebody goes to one of your articles and decides, “You know, I like this company, I want to hire from them,” it’s what you do afterwards that is so optimized that you can then afford to spend more money on more content and on ads?

Taso: Effectively, yes. And there’s a lot of historical knowledge that we have that allows us to do that. So we have some really great people in not only brand marketing, but in growth marketing, in our engineering side. So that gives you good ideas to sort of the culmination that has helped us cultivate such a good CRO system, conversion rate optimization system in this case.

Andrew: I’m looking to see, according to SimilarWeb, where else you guys are getting traffic, what else are you guys up to? It seems like what you’re doing is you’re buying ads a lot, like, you’ll even buy your competitors’ names on search engines, which is not that uncommon, but it’s working for you because you’re getting a lot of traffic from that. Why are you shaking your head on that?

Taso: Well, I actually don’t know the specifics behind that. The way that you characterize it made it sound slightly peculiar, let’s just say.

Andrew: Okay, I see Medium posts are big for you guys. I know content marketing you guys are big with, right?

Taso: Yes.

Andrew: At what point did you decide to create a content marketing strategy?

Taso: That’s a good question. I would say probably in the fourth year of the company, [second 00:30:40], I believe that’s correct, yeah.

Andrew: I’m still not feeling like I’m understanding why you guys grew so much, how you grew too . . . even if it’s about $200 million in bookings, I understand that you want to keep a lot of stuff close to you. Why reveal it to competition? But I feel like there should be a couple of things that you’re especially proud of that helped lead to the success of the company that we could talk about that gives us a sense of why you didn’t need another round of funding, which then will feed into the rest of the conversation, which is what does that mean for investors? What does that mean for employees? What does that mean for the future of Toptal if investors and employees aren’t getting a significant piece of the business? So do you have something that you feel especially proud of that we can talk about that helped you guys grow, get more customers in the door?

Taso: Well, this is pretty fundamental, it’s not a secret sauce. But it’s a good insight, and it’s very contrasting with how Silicon Valley works and how many tech startups work. But I think it’s an important point, and that is that we were profitable from day one. And that profitability allowed us to invest in different areas accordingly without ever really having to face the prospect of going bankrupt. So even if we were scaling slowly, we were always able to test something different out.

And what I find is that when you have a peace of mind to be able to test different initiatives within a company, and you’re very focused on making them perfect, and then executing on them flawlessly, then that’s a winning strategy. And what you find in Silicon Valley, generally speaking, is now a lot of companies take a ton of funding and then they just go as fast as they can to be able to spend all that money without actually ever learning what they did wrong, what they could do next to improve from what they did wrong, citing principles, and plus reflection equals progress, and what you can really do to build on top of those layers.

And so fundamental economic aspect allows one to understand really why Toptal is successful. I’m not sure it’s something so special that we did like one thing that was the mark that allowed us to explode. We never had a viral moment at Toptal, just didn’t occur. And so if you look at all the small elements, they all added up. And that ethos, in my belief, is really what allowed Toptal to be successful and what it is today. Allowing people to execute, and the time to execute, and the ability to be able to build layer on top of layer is really, my opinion, what has allowed us to be super successful over the long-term.

Andrew: Is there an example of something that took a while to develop? Like I’m reading “Seinfeldia,” this book on “Seinfeld.” And “Seinfeld” was getting crushed by even “Home Improvement” in the ratings, but NBC gave them time to develop their voice and space away from the executives who were telling them what to do. And because the executives at NBC decided we’re going to let this show go and explore its own way, it could get a little creative and have a show called master of your domain and get a little bit out there and have a show where the characters do nothing for the whole show, but wait in line to get in a Chinese restaurant.

And that ability at NBC to let some of their shows have space created this “Seinfeld” show, which gave them so much money that they were able then to go and invest in cable TV stations and a bunch of other strategies that helped them. Is there something like that that because you take your time, you are able to do what other people wouldn’t have, they would have given up on it, or they would have burned it out too fast?

Taso: 100%.

Andrew: What’s that?

Taso: That’s kind of the heart of the issue in the [inaudible 00:34:49], which is we’ve been executing with an indefinite timeline and people aren’t happy about that.

Andrew: So then, but what’s an example of one marketing technique that because you took your time, you could cultivate where other people would have given up? Do you have anything like that? You don’t.

Taso: Well, we have too many [initiatives 00:35:12]. Too many.

Andrew: Too many?

Taso: Too many [inaudible 00:35:15]. Yeah, too many.

Andrew: What’s one that we can talk about?

Taso: Well, look at the top scheduler system, that took almost [inaudible 00:35:23].

Andrew: How long did it take?

Taso: Eighteen months.

Andrew: Eighteen months, okay.

Taso: So if you go to a startup, and you say, “We’re going to go develop something and it’s going to take 18 months.” In their fourth year, there is no way anyone is going to be bought into that. It’s just not possible.

Andrew: Especially in a free calendar system that you can just use off-the-shelf.

Taso: Exactly.

Andrew: Got it. And so why does that give you an advantage that you have such a good calendar system?

Taso: Well, again, if that calendar system brings a 5% efficiency, and then our matching system gives a 5% efficiency gain, and so on and so forth, do you see where this is going? Soon enough, you have an entire system that’s 200% better than any competitor, and no competitor is going to have stamina really, or the wherewithal to develop all of that. They just don’t want to. So it’s a different mentality, it’s a long-term mentality, and all those little components have really added up to being what Toptal is today. So again, there is no one thing that I can ever recall that allowed us to accelerate in a way that we really figured this out.

Andrew: This is one of the problems that I have with talking to people at your company. It’s maddening how deep into the data you get to the point where it’s hard to communicate in an interview, but it also becomes a really tough dinner conversation. I went out for drinks with one of your guys, Dylan [Wise 00:36:53], he bought ads from us. I said, “Are the ads working on Mixergy?” He says, “Yes, they are.” But go, “But what?” He started pulling out a pen and paper and showing me how he had to analyze. He said, “Some people are not using the URL that you’re giving. We want to figure it out how many of those people are not using the URL. And so what we’re doing is we’re trying to understand how many people within the Mixergy audience might be going directly to Toptal’s website, and then how do we do that based on IP and time of launch of each episode?”

I go, “Dude, what are you talking about? It’s actually profitable. Why don’t you just let it go?” He gave me an answer. And the answer was, “Maybe if we figured out a little bit more profit that’s coming in from your ads, then it means we could go after other podcasters. And if we learn from this, we could figure out how to make those other podcasters who are more borderline work.” But in the reality, that’s not what it is. Dylan is just that kind of like mental . . . he just has to think that stuff through. And I feel like that’s the way your people are. This every little percentage has to be accounted for, and it’s madness that way. But that’s the way you are.

Taso: It is madness, but there’s a method to the madness, and that’s what has allowed us to be so successful.

Andrew: And this is a game of inches constantly played out and all the inches eventually add up into miles. And as a result of that and your determination to keep bringing in enough money that you’re not losing money and having to go out, that set us up for what happened. And we’re going to talk about that next.

First, I’ll talk about this second sponsor, which is HostGator. Tell me what you think about this as an idea? I always ask my guests for ideas with my sponsors. Not always, but often. Imagine if somebody said, “You know what? I’m not a developer, but I have this idea. I want to create a dev shop that does . . . ” oh, maybe they would need to be a developer, maybe they develop a little bit, but they say, “I’m going to create this side hustle. I’m going to create a dev shop that all we do is create iPhone apps, but I don’t have any developers. So what I’ll do is I’m going to go to HostGator, I’ll create, and when I get a client, I’ll talk to the client. And then I’ll go to Toptal, and I’ll hire developers from Toptal who will actually do the work, but I’ll give them my own, you know, URL so the developers if they’re even talking to the client, look like they’re working at my agency.” And that’s how Andrew gets his Andrew dev shop up and running. What do you think of that as an idea?

Taso: It’s an interesting idea. You’d have to preserve the integrity of the relationship and represent the relationship correctly. And so I think there might be a little bit of a challenge between hiring from us and then saying, “Well, that’s my dev shop, so on and so forth” because there’s got to be some sort of relationship beforehand. I’m going to say there is a strong case for that person being part of my dev shop. So I see it. I think it’s interesting.

Andrew: But you don’t think I could rely completely on Toptal’s developers to run my dev shop behind the scenes?

Taso: I definitely think you could. I think . . .

Andrew: I could. Let’s take it then to something simpler. Imagine I have no development jobs, and instead, I decided I’m going to create a design agency, right? I get a beautiful webpage designed, I put it up on a HostGator. Let’s call it Use WordPress, but I get a nice design on it. Somebody comes to me and ask for a design, I say, “Okay, I have a sense of it. I want you to talk to my designer. My designer is actually a designer that I’ve hired from Toptal, one of the best of the best because that’s your thing, right?” That designer does the work. I collect the payment, and then I pay Toptal for the developer. Basically, what I’m saying is build a virtual dev shop, build a virtual design shop, build a virtual finance shop, all using Toptal developers and nothing but a website from HostGator. What do you think of that business idea?

Taso: Well, I think it’s a pretty cool business idea. And again, I think you’ll just have to figure out how do you represent, how do you get your talent. I mean, if you say, “Hey, supported by Toptal . . . ”

Andrew: Oh, you want Toptal to get credit if I do that?

Taso: Well, we don’t, but I think you should represent to the clients that you would get the talent from some other agency rather than you doing your own work for . . .

Andrew: Ah, you were saying, “Look, hey, if you’re going to start pretending, don’t use my people to start pretending.” Got it. Okay.

Taso: Imagine if you created a company called, you know, Warner Development, but then we were sending everything to Accenture, and someone says to you, “Hey, can you have me speak to the development?” It’s like, “Well, hold on. I’ve got to get my Accenture guy over here.” The client’s going to look at you like, “Wait a second, I thought it was Warner Development not Accenture.” Everything is crystal clear between all parties in the relationship. That’s the only thing point.

Andrew: That makes sense. That’s why the people who I . . . I guess I saw one person who did that, and what he did was he was a developer himself, but when it was time to do the work, he could push it to developers from Toptal. All right, got it. This is not one of my best ideas that I came up with on the fly, but every one of us, as entrepreneurs, has ideas on the fly that we’re not executing on. The beautiful thing about HostGator is boom, go to, you get the lowest price that they have available, and literally within minutes, you are up and running with your site and your idea.

There is something about taking idea out of your head and putting it out in the world, even if it’s just your own personal site that no one else gets to see that forces you to think through the details in a different way and gets you excited because it’s up and running and it’s not just the thing in the world, it makes it more real. Whether it’s a brand new idea or your current idea on a hosting company that you don’t like, bring it over to, they will give you the lowest price possible, hosting that just works, and yes, even though they have super low prices, they will scale up with you to whatever degree you need, All right, so company’s profitable. As a result, my understanding is you didn’t need to take another round of funding. Is that right?

Taso: That’s about right. We definitely pursued a fair amount of venture capitalists and some others to be able to entertain different terms sheets. We did seek out . . . initially, we simply didn’t find any deal that was in line with what we wanted after our round in 2020. So yeah, that gives you a good idea of what happened . . .

Andrew: You mean you tried to raise money, you weren’t getting the terms that you wanted?

Taso: Yeah, precisely. We actually had one deal that we were just about to take, but really the terms were just not good enough.

Andrew: Why did you even want money if you were profitable from the beginning?

Taso: Yeah, very good question. You know, I suppose as an entrepreneur and as a CEO who is scaling the company, always want to figure out a way to grow faster, and with more money, you can experiment more and so on and so forth. After that event, which I think was sometime in 2014 or so, it didn’t have any other offers that we were entertaining, at least nothing that was good enough to sit down with folks, get term sheets, so on and so forth.

And as a byproduct, Toptal started growing a little bit more organically. We became a bit more strong in terms of our financial position, and we didn’t as aggressively seek financing relative to what we did, let’s say, from 2012 to probably 2014 or so. And so we ended up being self-sustaining and growing the company according to really how it worked out for the most part. Now, from all that time period, 2012 up until today, we’ve always entertained different term sheets. We’ve always talked to people. You know, this year I believe I met with KKR, I met with Blackstone, I met with a few other folks, just not nothing that’s interesting for us. We enjoy running the company. I’m always keeping those relationships warm. We haven’t found anything that is, let’s say, good enough.

Andrew: What we’re saying though is because you didn’t take another round of funding, the investors who did the convertible note with you don’t have equity in the business.

Taso: Correct.

Andrew: And if you continue this way, profitable and growing, people like Andreessen Horowitz may never get equity.

Taso: That is a possibility.

Andrew: And you do see a possibility where they might be able to get equity. What would trigger that?

Taso: Well, an IPO or an additional funding event for that. And so, in those cases, the provisions in the agreements would be triggered and they would receive their conversions.

Andrew: But not if you sell the company.

Taso: I don’t know about that specifically. I’d have to look at our notes.

Andrew: Okay, but assuming that you continue the course, they don’t get any equity. What do you think about people who say, “Look, Andreessen Horowitz, these investors, Adam D’Angelo, they signed up to get equity in a business. The business is doing well, they actually bet correctly on Toptal. Now, they’re not going to get their big payoff.”

Taso: Well, I can speak to the terms specifically. So, first, we negotiated terms at arm’s length with top law firms, and they are sophisticated investors. Let’s just start off with that. So that’s a very important point because there wasn’t any, “Hey, can you sign this quickly?” Something of this nature. These were sophisticated investors who knew what they were signing up for, and we agreed on terms, and we concluded an investment on those terms. So with that said, if they would like anything outside of their terms, they can come to me and say, “Hey, Taso, look, I’m not satisfied with investment,” if that’s their claim. They’ve never come to me, they’ve never written to me once.

Andrew: Your investors have never come in and said, “Hey, where’s my equity?” Or anything like that?”

Taso: Never.

Andrew: They’re not upset that they’re not getting their equity as far as . . . at least they’re not voicing it to you.

Taso: They have asked me twice [something 00:47:23] to the degree of “Can you give me X amount of millions?” And my response is, “That’s not in your terms.” And furthermore, and this is a very important point in all of this, where are my X amount of millions? It’s not like I’m doing a liquidity event for myself.

Andrew: You haven’t taken any money off the table.

Taso: Well, I haven’t sold any part of the company, and secondly, the way that the company is funded is through cash. That’s how our employees are . . .

Andrew: So all you get is salary and bonus, but you didn’t get millions to exit or to take a piece off. No.

Taso: Of course, not.

Andrew: What’s the basis that they’re coming to you asking you to get millions of dollars in exchange for what?

Taso: This is the whole unbelievable portion of all of this. It’s because they desire it in a timeframe that is in accordance to their timeline, not in accordance to what our timeline is.

Andrew: So they’re saying to you, “Look, give us some money and we’ll do . . . ” what? We’ll just eliminate this whole debt that you owe us, this whole agreement from before,” or why are they asking for money, under what conditions?

Taso: Well, there are no conditions legally that they’re able to ask for money and that I’m obliged to give them in terms of . . .

Andrew: But what are they saying it is? Why are they asking for it?

Taso: I have to be very specific on this. I am obliged to give them their principal and interest. And so that’s [inaudible 00:48:58] big component. Now, in terms of what they want, they want some “liquidity” supposedly. I’ve had two phone calls with investors in the last, let’s just say, year or so, where they’ve called me and they’ve told me what they would like. And in each case, I’ve asked them to write me an email concerning that issue or pertaining to that issue, and they’ve never done so. And so you can’t really have a pointed conversation on a quick five-minute phone call where somebody says, “Hey, I’d like a few million bucks.” And he said, “Hey, yes, no, maybe whatever.” It doesn’t matter what’s said on that call. You need to agree in writing what happens and figure out the legal details and the intricacies that happen after that fact.

The important part in all of them is that they have never written to me a single time stating a problem, but they’ve written to a journal. So it already says that there’s another motive at play here. They’re trying to do something else besides just get their money or their liquidity, let’s call it, that they have requested because it makes no sense. The first step, let’s say, Andrew, there was a problem with the interview. I would email you and I’d say, “Hey, Andrew was a problem with the interview.”

If they had such a specific [inaudible 00:50:29] investment in their liquidity, they would write me an email and say, “Hey, Taso, I have a problem with the investment. It’s not converting in a timeline that’s in accordance to my agenda,” which by the way, I am in no legal way obliged to appease their mere timeline desires. But nonetheless, they haven’t done that, right?

My door is open, and they can contact me and say. “Taso, I would really like to [inaudible 00:51:00] in some way where we can conclude on some liquidity for me, even though you’re not legally obliged to do so because I have such a strong desire to.” That’s purely on me to entertain them.

Andrew: You’re saying, look, they might come to you and say, “Look, we want X number of millions of dollars, and in exchange for that, this whole convertible note that we have, we’ll throw it out.” And you’re open to that, but that’s it, even though you’re not obligated to do it.

Taso: Precisely, I may be open to it, right? Now, if they come to me, and they say, “Hey, we want $1 billion,” okay, that’s ridiculous. And I don’t know what they want. The whole unbelievable part about this is that they went to a journalist, which we know, because the journalist referenced to me terms that are in our notes with them [inaudible 00:51:58] for them and there’s not that many people who had them. And they spoke to them about this, but they’ve never spoken to [inaudible 00:52:07] yet . . .

Andrew: Could it be that employee or a partner would reveal that to the journalist?

Taso: I don’t think anyone has that information to my knowledge.

Andrew: Oh, really?

Taso: Yes.

Andrew: Okay, so it’s only you, your lawyers, and your investors who would have that?

Taso: I believe so.

Andrew: Do you think it’s the angel investors who are just regular people or is it the venture capitalists?

Taso: I think there’s zero chance it is Andreessen Horowitz. I think they have way too much integrity and respect for doing something of this nature. That is my personal opinion based on what I know of the situation, and to not even reach out to someone or then to try to create this whole fanfare about how I haven’t given some investors equity because of their convertible notes when I have abided by the terms pristinely. I mean, it’s kind of strange, to be honest, right? Like my door is open.

Andrew: Okay, I get that. Is Roger Dickey still an investor in the business?

Taso: No comment because I don’t know the terms that we have with him.

Andrew: Were you upset when Roger Dickey, who invested in the business then created a competitor? I always wanted to ask you that.

Taso: The way I was disappointed or so is beyond belief. For somebody to do something like that, I think it’s absolutely ridiculous. And that just goes to show what the double standard is that, oh, look, I didn’t have terms that he had confidential information from us, yet he created what in effect is a direct competitor to us. Where’s the story on that? I mean, this is completely ridiculous.

And so when I look at that component where, yes, technically, he abided by our terms, we didn’t have confidentiality agreements, and we didn’t have a non-compete agreement. You know who people blame? They blamed me for not negotiating terms that didn’t allow investors to compete with us. So do I think it’s absolutely absurd that he did that? Of course, I do. But you know what? That’s business, you learn. In this scenario, people are saying, “Hey, Taso, you know, this is the situation with your investors. They’re unhappy.” Okay, first of all, they’re sophisticated investors, and they concluded on terms that we agreed upon with reputable law firms. End of story. And if they want anything beyond those terms, write me an email. I just don’t understand it, to be honest.

Andrew: I think what you’re saying is, “Look, I had to suck it up when an investor because I lived up to the terms of the deal, and he got to take advantage of a loophole in it or a difference. He got to take advantage of some part of the deal, I had to suck it up.” We’re all adults now. Maybe they have to suck it up and wait for an IPO or some kind of funding event from Toptal, and I’m not crying about it. I was upset, but I’m not crying about it and saying, “We should undo this deal.” That’s the way it is.

Taso: I wouldn’t characterize it as a loophole. I would characterize it as terms that we concluded on after [inaudible 00:55:36].

Andrew: I couldn’t come up with a better word than a loophole. I’m with you. By the way, did that business shut down? It did, didn’t it? Actually, he doesn’t seem to be with it anymore, but it does seem to be up and running.

Taso: Yeah, I’m not sure what the status is with them, but I can tell you what’s fact. We’ve had employees leave to go to them, and they’ve asked me personally to come back to Toptal.

Andrew: Okay, so let’s come back then to employees. I think most people would say, “You know what? Look, these investors, they’re sophisticated people, it stinks. It’s not great that they bet on a horse that’s doing really well and a company that’s doing really well, and they don’t get to make their money fast as they’d like, and maybe they may not even get it.” I get it, but most people would say, “These are sophisticated investors.” What they’d be more shocked by is that employees don’t end up getting equity at Toptal if they’d been with the company for a long time.

Taso: So I’ll answer the question in terms of the employees and [inaudible 00:56:40] individuals who have contingent option provisions. These contingent option provisions, first of all, are extremely, extremely clear and we do not lure on into the company saying, “This equity is up our goal, take this.” First of all, not equity, it’s a contingent option contingent upon many different conditions. And so we educate people on this. There’s not a single person in Toptal today that would corroborate the story that the information wrote about Toptal because only people who think that are former employees. And certainly, if they did think that they now know what the deal is, so there’s absolutely no way that anyone thinks that.

Andrew: They might now. But what about when they started? So look at this person, Anna-Chiara Bellini, a former engineer director, she left Toptal in 2017. She was with the company for about four years and expected that her stock grant in her agreement with you guys would give her 0.02% of Toptal shares. And she’s clearly disappointed that she didn’t get that. Did she have a right to be disappointed?

Taso: She has absolutely . . . I want to say she has absolutely no right to be disappointed, but she stated that she feels entitled to that. Now, in no way would I or Toptal ever represent that, a), an imminent liquidity event is coming, or b), that options would be granted in any case. There’s no way I represented that. She could’ve on her own interpreted the agreement and not relayed that to us. If she wrote to us and said, “Hey, I want something in writing that says something that this is valuable.” There’s no way we would’ve done that because there’s no way we ever represented that [point 00:58:54].

Andrew: If someone’s getting equity in a company, if they’re getting, it’s not a stock grant, but it’s an option, what is it exactly that we’re looking at?

Taso: Well, it’s not an option. And that’s very important, and I’ve made that clear.

Andrew: What is it?

Taso: It’s a contingent option, meaning that in the case certain events happen at the company, you would be granted an option to purchase equity in the company. And that’s a very big distinction than what some companies have RSUs or options.

Andrew: But once you give people even the possibility of it, aren’t you implying to them, “Look, come work for me, and in return for working for me, you’ll get potentially to benefit from the upside of the business, from the value of the company going up”?

Taso: Well, let me give you some history behind this, right? The history was actually created so that in the case that we convert or redo some sort of liquidity event, there’s already some sort of idea as to how much a person would receive in terms of a liquidity event if that scenario occurred. And what the media has now done is said, and what some of these individuals have done is turn that all around and said, “We are owed this. This is what we were allegedly promised.” That’s just not true. Everyone in our company who works there knows that’s not true.

There were a select number of individuals who I suppose from what the article said, because again, no former employee has ever written to me anything of this nature and said this precisely. So I can’t corroborate anything that anyone said or is stating as an allegation or a promise, so on and so forth from anyone in the company. The information had no evidence. It was all gossip, 100% on the employee side. They had not a shred of evidence. It was hearsay from people. One person said something to the effect of, “I’m owed $2 million.” I mean, it’s ridiculous.

Andrew: Yeah, it was Scott, I think, who said that. Ritter, am I right?

Taso: I mean, again, the question is where’s my team [inaudible 01:01:24]?

Andrew: Got it. So here’s what I’m getting from you. You’re saying, “Hey, look, guys, back off this whole thing because we’re doing well, we’re all getting rich off of it, and we’re all getting to take money, we’re all getting cash out of this.” Saying, “Back off of that, that’s not what we’ve ever been about, that’s not what we’re about now. I’m not even selling shares in my business.” That’s the thing.

Taso: Correct. I’m not . . .

Andrew: Do you . . . sorry, go ahead.

Taso: Continue, Andrew.

Andrew: Like how much when you’re hiring people do you tell them, “‘Look, this is a rocket ship, we’re going to be worth a lot of money, you’re getting equity in the business, you’re going to get to have a big chunk of this rising success”?

Taso: We never say and never have represented that people are getting equity in the business. It is just not a representation that we make. And so we have contingent options. Now, look, we just hired someone from Bain & Co, who was there for a decade, one of the most notable consulting firms and private equity in the world. They were there for over a decade, they were then a general manager at Rackspace, a public company. I think they actually went private and so on and so forth.

Long story short, when his executives, who joined Toptal, who’s very expensive by the way, but well worth it said, “Hey, this is my comp requirements and this is in my package. What does this mean? Can I value this?” The answer was, “Well, we have set this up to be able to have a more straightforward path for the case that we convert, this will happen. But you cannot value this as any sort of real equity or stock in the company.

And she said, “Oh, that’s interesting, that’s [inaudible 01:03:32] but given my comp, given where I’ve been, etc., and what you’ve offered me, okay, I’ll take it.” There was absolutely no representation that that clause represented some money for that person that they are guaranteed to. Now, this person could very well watch this interview and they will know that this is exactly the conversation that we had, and there will be absolutely no problem. So I’m perfectly fine stating that.

What has been stated from other people is the opposite of what I have just said, which is there are these provisions, we’re guaranteeing you liquidity event, we’re guaranteeing X, Y, and Z, and it’s worth something. There has never been a time ever, ever where I’ve represented that. And actually, what I brought to this interview is a statement that I made rather an answer that I gave to an all-hands interview on March 14th, 2018, and it was a response to a question that someone asked on the interview. I’d just like to read this. It’s very telling in terms of . . .

Andrew: Because your all-hands are all online and so you record it for everyone to be able to listen to afterwards if they’re not listening live.

Taso: They’re recorded, everyone is required to come to these all-hands and really is as simple as it gets. So let me state the question that this person asked. “A large part of the reason I am here is the opportunity for wealth generation due to a liquidity event. Should I reconsider my strategy?” My answer was, “Absolutely, you shouldn’t be here for a liquidity event.” I say very publicly that we are not planning on doing a liquidity event tomorrow. Heck, someone could come and offer us $100 billion and we take it, but that’s not in the plan. I’m going to be brutally honest with whoever asked that question. That is recorded, that is to our entire company, and that is what I have represented to our company across the board. There is no ambiguity in that statement. And for people to come out and allegedly state that we did the exact opposite of what that statement represents is just ludicrous. So that’s really . . .

Andrew: And you’ve been saying this all along, this is not . . .

Taso: Of course.

Andrew: Sorry?

Taso: Of course, I would never represent to someone, first, if there’s an imminent liquidity event, not unless we had termed sign and the deal was actually just about to go through. We really thought we were going to do something that was corroborated by hard facts, evidence, legal work, so on and so forth.

Andrew: What about your co-founder, Breandan?

Taso: I can’t comment on that matter, unfortunately.

Andrew: Nothing?

Taso: I cannot comment on the matter at all due to the legal nature.

Andrew: Okay, so then why are people . . . yeah, I know I saw the lawsuits say . . . Why are people then working for Toptal if it’s not to get a shot at this big wealth?

Taso: Well, why do people work anywhere? First of all, we pay above-market salaries and have commission structures that are very generous to everyone who is working within a division of Toptal that’s generating revenue. So just to put it in perspective, this year we’ll pay out over $5 million in commissions.

Andrew: Over $5 million in commissions?

Taso: Correct. So we have an elaborate commission system that is in existence at Toptal. By the way, that commission is on top of people’s salaries. So you should understand that, right? We have a very generous competitive salary and OTE plan on target earnings plan for everyone at Toptal. And sure that 5 million may be spread out across a few people, but the point is, is that we have a very competitive compensation package, and that is at least economically why people work for Toptal.

Andrew: You’re not paying less than market rates and then saying, “We’re making it up for it and these options are contingent options”?

Taso: Absolutely not. That’s provable, right? I mean, to be honest, in some cases, and our employees will likely watch this, we’re paying too much, which you know, is kind of laughable, right? It’s a funny thing, but we do pay very competitive salaries and packages that are what people receive. And we do not represent that our contingent equity is some sort of guaranteed form of any option, any equity, so on and so forth. It was actually put in there for the case that certain situations occur, and everyone at the company who works there today knows this.

Furthermore, when that article was written, actually before that article was written, numerous previous executives called me on my cell phone and said, “Taso, I’ve spoken with a journalist and he stated you’re giving out fake equity, you’re doing X, Y, and Z. It sounds like they’re trying to construct a story how this is happening from their perspective.”

Not only one person, not only two person, not only three persons said this, tons of persons, tons of individuals have called me and said, “Hey, look, I know the contingent option provision in our agreements. I know you didn’t represent this, so on and so forth.” So I almost think it’d be better to interview those folks who were executives at Toptal long ago who were not represented what the article alleges that other individuals were represented. And by the way, those individuals had prominent positions at Toptal. Any of the quotes that were in the article didn’t have a single executive that they quoted, nor senior leadership team member.

Andrew: Correct, but there were past ones, weren’t there?

Taso: Executive team member?

Andrew: Scott Ritter was he part of the executive team?

Taso: Absolutely not, never.

Andrew: Okay. Who’s Scott Ritter? They said it in here. Former director of client success. Got it. All right.

Taso: It’s a title that we give to people. You have to understand, literally, our account managers have a director title. And that’s because you want people to feel like they’re speaking with somebody important. A little bit of a secret sauce around Toptal to someone just now, you know, I’ll do the tradeoff for the publicity’s component because there’s no way that person was an executive member of the company. It was just a total misrepresentation if that’s what he said.

Andrew: When we first talked, you said, “Hey, Andrew, I heard you’re coming to Europe to run your marathon. Are you here now? Do you want to just come in and record in person?” I don’t think other people wanted me to record in person before. Why were you so eager for me to come in person? I sensed that you even wanted me to fly out just to come in and do this in person. What did you want me to see?

Taso: Well, I wanted a human authentic touch to this because what this article has done is portrayed me as . . . they not only misrepresented provisions, which is so far from the truth that it angers me, but it’s also said that I’ve lured people in, done all sorts of things that are tricky, so forth. Like the facts are this, investors never wrote me, I never represented to our employees anything other than the fact that they have conditional provisions that state they may receive options and [inaudible 01:12:03], and I’ve never stated the fact that we are going to have an imminent liquidity event. So all of those components I felt like they would be communicated more powerfully if you were in person and we can have an actual face-to-face because that article really portrayed me as somebody who is not listening to their investors. They made it sound like we already had some sort of negotiation, and I said “No, look, my door is open.” Those investors, any investor in Toptal, and by the way, I should mention that they are referencing only certain investors.

So it’s not all of our investors. Some of them I still have a lot of gratitude towards, and I truly appreciate the fact that they’ve invested into Toptal. Certain ones though have taken steps to what I would consider attack me and demonize me, and it’s just unfounded, it’s unmerited, it’s unsubstantiated by evidence or facts. It’s effectively gossip saying, “Hey, here’s this guy who became quite successful. Here’s a company which became quite successful.” And, you know, they constructed a narrative leaving out the facts that all these other employees that they spoke with, by the way, knew what was going on and knew what it was completely kosher.

Andrew: I did see that the article said something along the lines of, to be fair, many people who work at top towel didn’t expect any of this and have talked to us about it, about how they were fine with it. I don’t think they quoted them, but I do think that the two authors of the article did mention that this wasn’t every employee’s opinion.

Taso: Yeah, but they made it seem like I represented this to a majority of people in a material way that made some sort of difference. And there are no facts to corroborate that. You will not find an email or a recorded conversation or anything that states what they are saying. They’re doing it purely in their own self-interest, for economic gain in the case that . . .

Andrew: I feel like I’ve got a really good idea of who it is, but I’m not going to say who it is, and you wouldn’t tell me in private. But I have a really good sense of who it is. I’ve got like this whole thing in my head about why. But I’m not super plugged in with these people. I feel like you’re not super plugged in. You used to live in Palo Alto, in the heart of all this. You don’t anymore. You’re completely outside of the whole Silicon Valley mindset and physically outside of Silicon Valley itself.

Taso: Yeah, correct. And getting back to the heart of the issue, I actually think this Silicon Valley mentality has created a lot of this conflict. I’m not about creating this one-hit-wonder where it’s done, and after 10 years, okay, it’s over. These people made some money, and then Google owns it. We want to build a company that lasts. In order to do that, we’ve made decisions that are in the interest of the long-term, and seemingly, some people are pissed about that. So they want not the long-term, they want now. They want their liquidity now, they’re not seemingly interested in dividends, they’re not seemingly interested in any sort of profit sharing. Again, I don’t know because they’ve never . . . they want an event that gives them money, and they’re done. And it seems to be a significant amount of money, which they’re not entitled to at all by their terms. So that mentality, in effect, is really creating this friction, the long-term mentality which we have versus this short-term mentality than I would assert most of Silicon Valley has.

Andrew: All right, what’s next then? What’s next for Toptal?

Taso: Well, we’re going to continue to growing. We’re really excited about the future. Today, we had our executive team call. Everyone’s excited about the future, everyone’s excited about what we’re working on. We’re expecting more than 40% growth this year, which is really incredible. As you may know of the world, that kind of . . .

Andrew: More 40% growth? So that means if you did $200 million last year, which is what the article said, roughly $200 million, next year it would be 280.

Taso: Well, they have some numbers wrong, but it’s more than 40% growth.

Andrew: Wow, all right. And then are you going to expand beyond? Right now, what you do is largely it’s developers, but you also have a design division and you have a finance division. Are you going to add other areas?

Taso: Yeah, we do plan on adding other areas. The real crux and difficulty in doing that, I guess you could also say lies in Toptal’s success. We don’t just put a drop-down menu and say, “Okay, now we do lawyers or something of this nature.”

Andrew: Yeah, I’m surprised actually. What else goes into it? I’ve always been thinking, “Hey, you know what? Just create some kind of test to make sure that you get the top lawyers.” Lawyer is a good example. Give me a dropdown, I want a lawyer,

Taso: Right, so the reasoning behind all this . . . and by the way, I might have to just get my charger because my notebook is on 3%.

Andrew: Let’s close it out in a minute after this.

Taso: You mind if I just get it because it might . . .

Andrew: Yeah, go ahead. Go get your charger. Sure.

Taso: . . . it might die, just once.

Andrew: Sure, you got it. Where do you work when you’re outside of the . . . well, there is no office. We’ll find out in a moment. This kind of looks a little bit like office space. I’m looking at his ceiling, and I see a speaker up there. So maybe it’s some kind of conference space, but it doesn’t look like office space at all, maybe it’s his house there. All right, while we’re . . . there we go, hey.

Taso: Sorry about that.

Andrew: Sure. Where are you working by the way?

Taso: I’m in a living room right now.

Andrew: Got it. So you own a house there?

Taso: No, I don’t.

Andrew: Okay, you’re just renting in Spain?

Taso: Yeah, and this is the funny part about all this. I don’t own a house, I don’t own a car, and we’re supposed to give $10 million to some investors. I mean, it’s pretty comical, to be honest.

Andrew: Do you have a family now?

Taso: I do not.

Andrew: Okay, all right. Sorry, you were starting to say why I can’t have a drop-down menu item that says, “Hire a lawyer.”

Taso: Right, so what goes into creating a vertical at Toptal is the . . . how can I characterize this? Well, you have to have experts, you have to have people who understand the space. And I don’t mean that just from a marketing perspective, I really mean that from talent, marketing, and really all perspectives. Even when we create products, lawyers, for example, might create profiles differently. They might have different salient points that they want to put into their profiles that are more specific to being a lawyer rather than a software developer. Software developer might want to put something in from GitHub. A lawyer might want to put something in from NexisLexis, LexisNexis, however you say it.

And so you start seeing the salient points that are different, and you really have to get them perfect. If you don’t get them absolutely perfect, then people won’t look at you as the expert in this field. And not only do you have to get them perfect the first time when it launches, because that’s sort of the big moment when [inaudible 01:20:12] or that, “Hey, we’re doing product managers, or project managers, or whatever it might be.” But you have to sustain that perfection. And in order to sustain that perfection, you have to have systems and processes in place that speak specifically to that vertical. So that gives you a good idea of how we think about this when operationalizing it and constructing a new vertical. It’s really a big process. And there are lots of different small details that go into each vertical that are unique and unto themselves.

Andrew: And are you thinking of expanding into those areas, and you’re starting to think about how to create that process?

Taso: Yeah, we’re going to be ideally in 40 verticals over the next 10 years, let’s say. So we do plan on expanding into a fair amount of verticals.

Andrew: Do you personally sit in and think 10 years ahead, are you sitting and journaling 10 years ahead, or doing what to . . . do you think literally 10 years ahead and then what? How do you do that?

Taso: Well, when you say do I think 10 years ahead, of course, I think 10 years ahead.

Andrew: You do?

Taso: Absolutely. Now, do we have financial projections that speak to that? We might somewhere . . . I would have to speak with our VP of finance on that. I’m not sure if he actually has something that’s official that’s really well done. In regards to the planning, I mean, we have a solid five-year plan, a very solid five-year plan, and we work to execute against that.

Andrew: And what’s your personal process for coming up with that? Sam Altman told me, I think he sits with a notebook at the end of each year and thinks about next year and starts to plan things out. What’s your version of that?

Taso: Well, we have a very robust OKR system at Toptal. And so everyone is aligned on a very specific goal. That goal will be to be the greatest talent company in the world. And that objective or vision statement, if you think about, it has five specific key results that amount to that vision statement, and then everything connects in from there. And so if we look historically from what we did in the previous year, it’s very easy to project forward what is going to happen next year and then extrapolate forward where we should be going based on how much capital we have, based on what we can execute on, so on and so forth. So with that said, we’re able to quite easily craft at least a five-year plan. Now, a 10-year plan I think is a bit ambitious. I think Bill Gates said something like, “[inaudible 01:22:46], but no one can really figure out what to do this year.”

Andrew: Can you repeat that? I lost you for a moment.

Taso: I don’t remember the specific quote, but it was something of the effect of everybody has a 10-year plan, but people are always surprised what happens in a one-year timeframe in effect, right? So, you know, yes, we have a 10-year plan, but it’s tentative, so to speak, but we have it. And we’re really excited about the next 10 years. We’re not excited about some exit, or some liquidity event, or something of that nature. We’re excited about the growth of the company. And again, if you go back to that issue that we spoke about previously, it doesn’t seem like people who are in the company as, let’s say, note holders are very excited about that. What it seems like is they want liquidity, and based on our trajectory, but again, you can negotiate something, but they’ve yet to reach out to me.

Andrew: But you’re saying there’s a possibility that you guys go public or some other thing that they could end up with a significant piece of a business that’s going to do significantly more than it’s doing today.

Taso: There’s a possibility of that, of course, right? And we may, in the future, be thrilled to do something like that. It depends on how the future materializes, it depends on what deals we see. You know, I have a long history of talking with investors and seeing if there’s a deal that would be interesting for us that would fund the company that we think is reasonable. We just haven’t found anything yet. We’ve found that running the company without investment is much more efficient and in line with Toptal’s goals than taking additional capital that is on what we consider unfavorable terms relative to what we want.

Andrew: I think that there’s a quote in the article and the information that says something about, well, here it is, “I believe you can build more enduring companies over 20, 30, 40 years.” That’s what you’re thinking about here with Toptal. All right, for anyone who wants to go check out the site, it’s Toptal, top talent, that’s where the idea came from,

I want to thank the two sponsors who made this interview happen. The first, I’m telling you, you should go try this. Next time you’re in a lousy mood, or you’re not productive and you’re thinking what’s wrong with me, Taso, try this. Go to, just hit play and see what happens. If it doesn’t do anything, I’m totally open to criticism, totally open to hear that it doesn’t. If it does, I’d love for people to tell me, including you, Taso, “Hey, this actually surprisingly effective.” And it’s And if you want to create a website or move your website to a good hosting company, go to Taso, thanks so much for coming on here

Taso: Andrew, thank you very much. I greatly appreciate it.

Andrew: I keep thinking by the way of the time that I did a live event in Austin. I didn’t realize this, you were in the audience at that first live event years ago watching Tim Ferriss, weren’t you?

Taso: I could have been. I don’t recall that moment specifically.

Andrew: You told me that a few years ago, and I think you were at that live event. Now, I’m doubting it, but I keep thinking about where you were, where you were, where you started? And now, you’re not saying this, but it is possible. I’m not going to say because you’re going to feel uncomfortable. Look at this, what you’ve built is huge. All right, thanks so much for being on here, Taso. Bye, everyone.

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