Andrew: This course is about how to hire and manage remote teams. The course is led by Ross Kimbarovsky. He is the Founder of Crowdspring, the marketplace for logo design, business card design, graphic design, website design and copywriting.

I’ll help facilitate. My name is Andrew Warner. I’m the Founder of Mixergy, where proven founders teach.

And, by the way, this is all the topics that we’re going to be covering here in the program today and we’ll go through them one by one. But first, thank you for doing this course and second, the reason that we want to teach this is because people who don’t hire teams and manage them properly remotely, can experience pain that you yourself experienced. In fact, you hired someone locally, a woman, who didn’t work out with. Why?

Ross: Well, first of all, thanks Andrew for giving me an opportunity to talk with your audience.

Hiring is really critical, particularly early on the company’s life. And it’s just you, you can rely upon yourself but you can only do so many things.

The problem becomes…

Andrew: Did you just have this sound effect come up?

Ross: Yes. Let me turn it off [??]to reduce the noise.

Andrew: What program makes the sound?

Ross: One of our collaboration tools that I’m using with the engineering team, I forgot to shut that down.

Andrew: You guys have a lot of software to use. I’m sorry. So you had an issue. You hired someone and what happened with her?

Ross: We did our normal search. We looked for a really good candidate. We had a lot of responses and we were looking very early on to hire a female engineer. It’s something that we really thought was important because there are not enough female engineers. And so we went out of our way to talk to groups of women engineers to invite them to apply. But ultimately we wanted to hire the best candidate and we had a lot of applicants and we thought we had out of the bunch of applicants the best candidate and we were very happy to also believe that it was a woman.

And so we hired this person and it ultimately was a really frustrating experience for us and for her as well. Because it turned out that she just wasn’t the right fit culturally, wasn’t the right fit technically with us and we ended up parting ways within about 3 weeks. But it was a very painful process for us, both in terms of getting to that point but also because we found ourselves in the situation of having to start that search from the very beginning.

Andrew: And one of your challenges is, like many people who are listening to us, they’re not in Silicon Valley and you’re not. You’re in Chicago. And you don’t want to limit yourself to people who happen to be around you in Chicago. You want to broaden your search and bring the best people that you can possibly can work with and then once you find them, you want to make sure that they start out working well with you and that they continue to be strong team members.

And that’s what we’re going to show people how they can do, right?

Ross: Yes. That’s absolutely right. It took us a while to recognize so I hope that people that are listening take one thing away from this which is look for great people that will help you and don’t focus on things like geography unless it’s absolutely critical.

We made the mistake of making geography one of our most important factors for the first couple of years of our life as a company and it hurt us because we weren’t hiring the right people. We may have been hiring the best people out of a pool of candidates but they weren’t the right people for our team.

Andrew: All right. And today how many people do you have at CrowdSpring?

Ross: Today we’re 14 people. We support a community of 200,000 so we’re a small team but supporting a very large community.

Andrew: 200,000. And as people can see, you’re working from home today. Anyone at the company gets the opportunity to work from home and half your company has to work remotely, right? Because they’re not in Chicago.

Ross: Right. Half of our team is [??] or elsewhere in the United States. Half is in Chicago but on a day like today, I believe there’s nobody in the office.

The Engineering team works remote every Friday, just by choice. Four years ago they wanted to do that. Sometimes somebody will go to the office because they feel like it’s a good time to focus. They’re going to be the only ones there but everybody can work remotely at any time. And remotely means anywhere. Whether they’re traveling in India, on a boat in the middle of the Atlantic Ocean or in a coffee shop next to their house.

Andrew: And we’re actually going to get to see that later on including and that’s when we’ll explain what this photo is. But for now let’s start off with the very first tactic on our list which is, you say do the work yourself first so that you know what you need, that you know what you need the people that you hire to do. In fact, you guys used to work insane hours. You, personally, used to work insane hours answering customer support. What were those hours and why would you do that?

Ross: We were fortunate in one respect. My co-founder, Mike Samson, in the company gets up very early, and I stay up late, so we had coverage for customer service 20 hours a day. In the very beginning, we didn’t have a big budget or really an understanding of what customer service would be like for us, so we said, we’re going to do this ourselves. We’re going to try and figure out what are some of the pain points for our customers. We did that for two reasons: We wanted to directly communicate with customers. We didn’t want to have a wall between us and the customers, but more importantly we didn’t really know what kind of customer service people we needed. We didn’t know if we needed to hire people who were good on the phone, people that were good writers, people that could speak many different languages, because today we have a community of 200,000 from every country in the world. Back then, we had no idea whether we would only have U.S.-based clients and freelancers or from all over the world. We committed to do this job ourselves so we could understand the kind of people we needed to hire, and when we hired them, what we would help them and train them to do.

Andrew: Then, as a result of doing it yourself, what did you figure out? You told me that you got an understanding of the kind of person that you wanted to hire and the kind of work they needed to do, but can you be a little more specific?

Ross: Sure. One thing we recognized is that there were certain points of pain for our customers, and we had to be empathetic to those points. When you live with a product, when you’re developing a software product, and you live with it for six months a year, things become second nature. You don’t see the flaws but your customers do. When you’re talking to these customers, they’re pointing out flaws in areas that you just can’t see. When we hired our first customer service people, we were able to sit down and say, “I know this seems very simple to you, and you’re going to think these customers are absolutely nuts, but here’s what we’ve learned. Many of our customers have a problem with this process that we take for granted, so we need to change the process, first of all, because if all these customers are having a problem, it means it’s not a good process, but importantly we need to be empathetic. We can’t assume that because it’s easy for us it’s easy for somebody in China who doesn’t speak English the way we do, or it’s easy for somebody in France who may speak French fluently but not English.” The second thing we had to communicate to them and we helped our customer team understand is cultures. Cultures are very different across the world. Expectations are very different. Expectations from customer service are different. Some cultures are very demanding of customer service, and other cultures not at all. They actually are not used to great customer service.

Andrew: Ah, I see. If you hadn’t done it yourself, you would have not known about these differences and would not have known to communicate it to your customer service team. You wouldn’t have even known, you told me before we started recording, what questions to ask customer to give them the service that they need and to understand what kind of interaction they’re looking for.

Ross: Exactly. We would have hired people, and we would have expected them to learn on the job essentially some of these issues that we ran into; that there are cultural difference and there are ways you can overcome some of these differences. The advantage of doing the job ourselves was we were able to sit down and say, “here is what we’ve learned to help you get started.” We did throw them out into the field and say, “Now you figure it out on your own,” because that’s unfair.

Andrew: It sounds ridiculous, but I’ve done that. Especially with something like customer service, I would say, “I need somebody to do customer service because it’s becoming a problem. I’ll hire someone, and they could just do it.” Customer service is customer service. Sit down, get it down, and then when they don’t get it done right, I think there’s something wrong with them, and what I’ve learned over time is, no it’s the way that I got them on board. All right, and that’s why I wanted to start with this point. You’re saying, first do it yourself, get an understanding of what you’re expecting, get an understanding of what the job is, and then you can delegate it to someone else. As a result, today you no longer do customer service all by yourself, and you don’t do it using standard email. This is the software that you use, by the way? Zendesk?

Ross: We use Zendesk. We’ve got an awesome team of customer service people that are covering nearly the whole day, seven days a week, both phones and using Zendesk. It’s one of the things I’m most proud. We have a 95% happiness rating, because we ask our customers to rate us every single time we talk to them, and 95% of our customers are very happy with the service we provide which as you know in the world of customer service is a pretty great rating and we are pushing to get it better. We want to get to 100, as tough as it is because we think it’s an enormous testament to the quality of our team that we can maintain with such a huge community and such a small staff, such a great customer service organization.

Andrew: All right. Next big point is, get advice. I’ve got this visual. Who is this gentleman up here on the screen? Who is Mike Adacari [SP]?

Ross: Mike Adacari [SP] was professor who taught, maybe still teaches, at Booth. University of Chicago Booth School of Business. He had been professor to my co-founder during his MBA degree. When we first started out talking about our idea for a start-up we wanted to test some of our ideas, the business model, our thinking with smart people that we knew. So we looked around and we identified the smartest people that we knew that we thought also would be critical of our ideas, not just complimentary. We didn’t want them to say “great idea, go do it”. We really wanted them to bite into us and say “That’s the stupidest idea I’ve heard, why are you wasting your time?”

Andrew: You wanted them to say it was stupid? And did he say it was stupid?

Ross: Yes. In fact, it was an interesting story very early in the days. When Mike and I initially started working together, this is Mike Samson, my co-founder. He was looking to acquire a video post production business here in Chicago and he was talking with his professor, Mike Adacari [SP], about that. So when we met to talk about Crowd Spring for about 50 minutes Mike Adacari [SP], the professor, was trying to talk my partner out of partnering with me in launching Crowd Spring because he thought it was going to be the worst idea possible and that he really should go into that video post production business. It was a surreal moment for me because I said “I’m sitting right here, are you kidding me?” But it was a very interesting conversation because he pushed us really hard on our assumptions across the board and when we walked out we had very different reactions. My partner was disappointed that somebody he looked up to and respected a great deal was so critical of the business model. I was jumping for joy. And the reason I was jumping for joy was because no investor would ever rip us apart as hard as this person did in that meeting. And I realized at that time if we can answer every one of his objections to our own satisfaction and ultimately to his satisfaction that we would have a very strong business. So we committed to do just that. We said that we have to overcome every one of these objections. We have to make sure we can answer these questions. When we got to the point of talking to investors we didn’t hear a question that surprised us. We had dealt with this before. It’s important to that on every issue whether it comes to hiring, fundraising, organizing the company. Find really smart people because as smart as you think you are, there are always so many holes to your reasoning. You get too close to the idea and you can’t see these holes.

Andrew: I know I’ve done that. All right. The next big idea is hire for 30 days. And before you and I talked I started doing some cyber spying on you. I wanted to get a sense of what you were doing so I went over to your jobs page and clicked in here and just wanted to get a sense of how you are hiring and see what I could figure out from the outside. The one thing that is not on here, that anyone who does what I just did, which is try to figure out your process from the outside, one thing we wouldn’t know is about this 30 day thing. What is the 30 day thing that doesn’t even appear here on this site, how does it work and what has it done for you?

Ross: We used to, when we started, when we found somebody we thought was a good engineer or good customer service person or good marketing person we would extend an offer and hire them as a full time employee. We ran into a couple of problems, we hired a couple of people and we made a mistake. We realized very quickly we hired the wrong people. In one case, the first person we hired, literally the first engineer we hired when we first started out, we realized that mistake after just a handful of days. But there have been a few others, so when we came to that realization we thought, it’s really tough to commit to a full time hire because that person has to either leave a job or give up other opportunities with the expectation they are going to be working for you for a while. And for us, we’re committing to that person and we’re saying them “You’re going to have this job for a while”. And so we said, that’s a really bad way to hire. We really should both have a chance to look at each other. We should have a chance to see whether the person we’re hiring ultimately is qualified, whether culturally they’re a good fit, because no amount of interviewing is going to answer that question.

Andrew: In fact, you gave me an example of two guys. When you’re remote, you need good headsets and good communication. I mean, good communication tools allow you to hear each other and keep you from getting frustrated when calls are dropped or whatever. Two guys each had bad headsets, and you couldn’t hear them, and it caused trouble in your communication. What did they each say and what happened with them, because I think this gives an illustration of why the first meeting and even the second don’t give you a full indication of what a person’s like.

Ross: This is a great example. We started hiring people only on 30-day contracts with no exceptions. We hired some time ago, a number of years back, a young engineer on a 30-day contract from Brazil who was very talented, but we had a hard time communicating with him occasionally because he had a headset that ultimately failed in the first week he started working for us. The audio quality was really bad, so it was tough to understand him. His English was fine; it was just tough to understand. I said that to him. I do, and I know we’re going to talk about that shortly, weekly reviews during those first 30 days, and one of the observations I made the first week was, “very tough to communicate with you. Audio quality. Sometimes I can’t understand. The other people on the team are having a difficult time.” That was one of the things I said I wanted him to improve. He said, “I got it. I understand it. I’ll improve it.” He next week told me he had ordered a headset, and the following week he said, “I don’t know why it’s not here.” Then another week went by, and another week went by, and it was excuse after excuse. In some respects you have to be somewhat flexible because he is somebody in a foreign country. It may be much more challenging that me going online and ordering and having a headset tomorrow. I’ll contrast this person, who ultimately didn’t work out, and we had to let go, with another person we hired more recently with the exact same experience. Both young guys, also from Brazil, also had the same issue in the very beginning.

During my first week review session, I said one of my observations, the only observation that first week, that I thought needed improvement, was the audio quality. I wanted to see what he would do. I didn’t say, here’s what I need you to do, I just said this is an observation. After we hung up, he called another person on the team, got them to order a headset from Amazon for them, ship it priority service to Brazil, and when we came back from the weekend next week he signed up with the same key. He asked what headset we used, ordered the exact same one, and he was working on it. I would have been happy to buy one for him, because ultimately we would hire him, but we see how people respond to feedback. It’s so critical to understand how somebody will respond to feedback. It helps us measure whether they’re going to be a good cultural fit. Here is somebody who solved that problem immediately. He didn’t wait even five minutes to start solving it, and was conscientious enough to follow up and make sure that he had it. He didn’t make a big deal of it. When we started the next call in a couple of days, he had a headset. He didn’t say, “Hey, look what I’ve got.” It was just, here’s my turn to speak, and that’s it.

Andrew: Doers are amazing people. You want to work with doers because they just, they amaze you that way. Meanwhile, they don’t necessarily talk any different than people who aren’t doers, which is why you have an interview with two people. They both could sound the same. The guys who’s even lazy could sound better because he’s good at promoting himself, but you can’t tell until you actually give them some work and get to see what their results are like.

Ross: This goes back to the 30-day period.

Andrew: Right.

Ross: The reason we thought bringing them on for 30 days is we wanted that flexibility. We didn’t want to tie ourselves to somebody who just could not do the work well or who didn’t fit well with the team. More importantly, we didn’t want to communicate incorrectly a promise to an individual that they were going to be working with us for years. We wanted both sides to know that after 30 days either side, if they were unhappy, they could move on. That was really important to us, because it’s a mutual 30-day period. Every week when we talk, and I know we’ll talk about it, I ask for feedback, too, because I want to know what we’re doing wrong.

Andrew: Let’s get into that now. Here’s the next big tactic here. You say, you review performance weekly in the first four months, and what I’m curious about is what exactly you do in those reviews. Actually, why don’t we talk just quickly about why reviews are so important on a weekly basis when you’re working with someone remotely, and then I’ve got a notepad up here. We’ll talk about the breakdown of what you do in those reviews, and what we can do.

Ross: Traditionally, in the enterprise world, you have these annual or semi-annual reviews . . .

Andrew: Right.

Ross: . . . which are worthless because if an employee, at the end of the year, hears for the first time that they’re doing something wrong, then the only opportunity to correct that problems is in the future year. You’ve wasted an entire year waiting to tell them something. If I get to an end of the year, and we do those as well, and I tell one of my employees something that they haven’t already heard a number of times, I fail. In the very beginning, during the first 30-day period, we think it’s one of the most critical areas, because it’s our first opportunity to build that culture of instant feedback both ways. We actually schedule, I scheduled a call, after the first week and then after the second week. I do it at a time when the person isn’t distracted. I focus on five things.

Andrew: Yeah. Let’s bring up the notepad, because I always hear you’re supposed to have these meetings, and I never know what to do in them, and end up being a big waste of time, and then I give up on them. I want to walk in with an agenda and know what I need to do. Even if I don’t use your exact agenda and I adjust it, I at least want to have some structure. You’re saying the first thing you do is a top five things of what?

Ross: Five things that they’re doing well, so the top five things that I like. These could culturally they’re fitting in well with the team. It could be they’re on time, and there’s absolutely no problem. It could be I love their sense of humor. It could be the work is very high quality, or they’ve contributed even in the first week things that I frankly didn’t expect them to contribute, or they’re teaching us things we didn’t know. I try to identify five positive things.

Andrew: Five positive things. What’s next?

Ross: The next is the top five things they can improve. This again isn’t limited to just the work they’re doing, but like in an example I gave earlier, if the audio or video quality is bad, if their broadband connection keeps failing, if their computer keeps crashing, if they are constantly late to meetings or disappear for hours during the day. It’s anything. I limit it to five things, particularly on the top five things they can improve, because if I have a long list, 10 or 15 things they need to improve, they’re not going to make it to week two. That means I failed in hiring this person in the first place. I’m really looking to hire a great person to join our time. If I have a list of 15 things that I found wrong with the things they’re doing just in their first seven days, then I did a terrible job.

Andrew: Right. Then, the next one is?

Ross: The third thing is we invite feedback. We ask them for feedback and how we’re doing. In particular, I want to know how I am doing, because I’m usually interfacing, particularly with our engineering team. I’m working very closely with them. I want to know and make sure they’re getting everything they need from me, that they’re getting everything they need from the rest of the time. I want to make sure that they’re never found lacking in support or resources. We also talk about collaboration tools. Because we have such a distributed team, it’s very important for us that technology doesn’t limit our ability to work together. Particularly when we hire a new person, we ask about the tools we’re using, whether they have suggestions on how we can improve how we use those tools, but more importantly, we ask them whether they have used other tools at other companies that are better. Ultimately, one of the big advantages of bringing in new people is they have new experiences, different experiences, and it may be that we’re doing something that’s okay, but we can improve it significantly through a different tool that we’re just not aware of.

We also ask them for that level of feedback. In that meeting, I always set expectations. The expectations largely revolve around the five things they can improve. I tell them very clearly, here are the things I need to see from you in the next week or in the next couple of weeks to make sure you’re progressing on the right pace during this 30-days period. We continue to have that conversation over the first 3-4 months, we just don’t necessarily have it weekly. I try to do it every 2-3 weeks, bur really on an as-needed basis. I will talk to somebody everyday if necessary, although that also means that they’re probably doing something wrong. During the first 30 days, really critical to do it in a regimented period, because if you don’t, if you wait the 30 days and then say, “Well, I think there are five things that I’m aggravated with. You’ve wasted thirty days. These are things they very well could have corrected and now you’ve put yourself in a situation of do you hire this person assuming they’re going to fix these things or do you not hire them because you’re not sure. When we get to the end of that thirty day period, people we hire have fixed every one of the problems that we’ve identified.

Andrew: And then there’s one other thing that you told me about before we started that you do that I’ll include here. You also want to know, you want a review of the review process.

Ross: Well sure, I mean we talk about this feedback process because that’s important. It’s important for us to recognize whether there are communication problems. So particularly as we hire people and we’ve started hiring people from other cultures who speak other languages, communication online can break down oftentimes. If you and I are talking face to face, small facial gestures may be visible and may make a difference, but in a setting where we’re not doing full frame video for example where frames are skipped, there are nuances that are missed and so I worked really hard to make sure that there’s nothing going on with these missed nuances, that what I am communicating is what this person is understanding. So one of the things I ask when I say here are the five things that I think you could improve, I talk about each one and I ask do you agree? Do you agree that this is an issue because I want to know what their perspective is because if I’m talking to somebody and their microphone is terrible and they say I don’t think it’s an issue, I think it’s perfectly fine and I can’t understand a word they’re saying, I know this is going to be a problem not just because it will be tough to communicate but it means every time we run into a problem we’re going to be debating and arguing over whether that’s a problem or not and that’s not a healthy way for teams to work.

Andrew: Alright. On to the big board and the next big idea is you’re saying don’t hire the last man standing and you have a position, you’ve already talked to 20 people. It’s so tempting to just say all right you know what everyone else stunk, this guy’s not so bad and hire them. You guys made that mistake?

Ross: We have.

Andrew: Is that where this came from?

Ross: Yes, you know this is so difficult, Andrew, particularly when you’re starting out with a company and you’re inexperienced. You’re looking for early employees and you have 10 people respond then you have the best of the ten and you want to hire them because you want to get started and we were in that position and we made this mistake a number of times. The reality is that the best person from a pool of candidates is not always the right person for your team and you learn that mistake painfully if you don’t realize that. We ultimately realized that the right person for the team isn’t the last person standing, it’s the right person. It’s the person that you would actually hire even if there was not a single other applicant to your job and so we completely shifted the way we advertise. We used to have an advertisement that we would periodically run when we were looking for engineers and then we said you know what, we don’t really care if 500 people apply for this job or just one person because we’re looking for the right person. That’s why you have a jobs page right now for crowdspring.com because we are constantly receiving resumes and when we identify the one person we’re not looking to compare them to everybody else who applied for that position. We measure them against who we think works well for that position. We measure them against our team and that was a huge difference for us in two respects.

First of all it caused us to move away from the dependence on geography. When we started out we were really focused on hiring people here in Chicago in part because we wanted to create a company culture here in Chicago, in part because we thought it was easier to work with people in the same office and that’s true for a lot of entrepreneurs. They try to build teams in one place and sometimes you’re lucky enough to do that but other times and you’re not and we found ourselves disadvantaged every time we would be looking for people because we would see somebody in Texas, in California who was great and then we’d reject them because they were in Texas, California or in Brazil or in France and we ultimately realized after we made a few mistakes that it really doesn’t matter. We shouldn’t compromise on geography because if we can do a good job building the culture, if we can do a good job helping it grow, if we can hire the best people who motivate each other than where they are located is irrelevant and part of that realization was the notion that it doesn’t matter whether you live in Chicago or in France, if you want to work remote, work remote because ultimately we want a culture that celebrates that and makes it irrelevant where you are and that really opened up the door for us because those two things, not hiring the last person standing Two things, not hiring the last person standing from a group of candidates, and ignoring geography when we are hiring. Geography is not unimportant. If we have two identical candidates we would still prefer to hire somebody in Chicago if everything else is equal. We’ve never had two identical, where everything else is equal.

Andrew: All right. Fair point. Onto the next one, which is fire quickly to stop the bleeding. This person who you told us earlier about, the one who you asked to get a better headset do you could communicate more clearly with him. He said yes. He didn’t do it. He said I’ll get on it. He didn’t do it. How long did it take you to let that person go?

Ross: Too long. That was so-so. For the most part, we have been very good about letting people go who are not working out. As I said, as few as a couple of days. In clear cases, where it just wasn’t working, somebody who we had hired and was late for the first four days of their job, four hours a day on the average, was obvious to both sides.

In that case, I gave much too much leeway. I was really trying very hard to help that person grow into the position because they had a lot of talent. I recognize that I was investing a lot of my time counseling. A lot of my time managing a problem that just became a bigger and bigger problem. I finally said enough is enough because I was able to focus less on the rest of the team. I couldn’t focus as much on the company. Luckily enough for us it came after we had been in business for three years. It was a painful lesson anyway but it didn’t threaten the company.

If you end up doing that with an early employee, where you are investing 30% of your time counseling effectively, you’re going to suffer. Your product is going to suffer. The rest of your team is going to suffer. It’s infectious. It’s like a disease when you have somebody who is not performing well. The rest of the people look at that person and say, “Well, maybe that’s the standard if the company isn’t letting this person go. Maybe it’s OK not to perform to the best of my ability.” I finally realized that it was such a huge mistake both in terms of my own time and the disservice to the rest of the team, but to this person too because we didn’t give them the opportunity to go and refocus. It was sending the wrong message to my team.

Andrew: On television when you hear someone talk about firing, or you see a character fired it’s always saying, “You’re fired!” Just a quick, “You’re fired.” Or the boss says, “Ha ha! I got to do it! Finally! To wreck the person’s life!” In reality, the reason that we put it off for so long is because it’s not easy. We don’t ever learn how to do it. I went to four years of college at NYU focused on business and they never told us how to let people go. It’s something that’s so critical. If you do it wrong you end up with legal issues. If you don’t know how to do it you end up postponing it and procrastinating.

You actually have a video online which we will link up where you give some tips on how to let people go. I would encourage that people watch this and keep studying how to do it so you don’t hesitate or procrastinate. Don’t put off what you know you should be doing.

Ross: Yes. The most important lesson in firing is as difficult as it is, and I have fired plenty of people in my career, you have to do it to protect your company and the rest of the team. You are undermining the entire team and your company when you let people who are not performing continue to work for you.

Andrew: It is a weakness of mine and I have to keep working on it. There is not anyone now that I need to let go of, but I wonder if I don’t hire people because I’m worried that I won’t be able to let them go.

Ross: I’ll tell you how I measure this right now. It’s actually an interesting exercise, not for people that I’m hiring but for people that are working for me right now. Periodically I think about what would happen if I left Crowdspring and started another company. I ask a very simple question. Who would I hire? Which person would I hire? If I ever answer that I would not hire that person that’s the person we would let go.

Andrew: Right. That’s a good way to think about it actually. I always do it in my head and I think every one of them I would want to recruit again. It’s a fairly small team here. We’re not as big as you guys.

Ross: We’re tiny too but that’s good for your team. Good to hear.

Andrew: Yes. I was actually expecting that you had dozens of people. I didn’t realize that you were just at fourteen. Impressive what you were able to build with such a small team of people. I keep checking out your website and watching how many designers are on there as the projects grow. I assumed you guys had a much bigger organization back there.

Ross: We have competitors that are four to five times the number of employees.

Andrew: Oh, I know.

Ross: Part of what has helped us stay small and nimble are some of the mistakes that we’ve made and these are the lessons I’m sharing. I’m hoping people can avoid them and grow faster than we did because they wouldn’t get [?] by some of these mistakes, you know. If you hurt the wrong person, it can stunt you for 3, 6 months and 6 months in the life of a start-up is a lifetime. And so that’s why it’s so critical.

Andrew: One month is. All right. Onto the next which is set expectations from the very beginning. You’re someone who used to come in at random times, were you, right?

Ross: Yes. I mean, this gets really tricky because one of the problems with flexible culture, we have a very flexible culture, is that you have to be flexible with a lot of things that people want to do. So one of our guys, for example, is a musician and wanted to work longer days but four days a week and that was perfectly fine with us if he got his work done.

But what ultimately happens is you run into situations where you don’t set the expectations correctly and if you hire the wrong people they can abuse those. So we had a situation with somebody that we hired who was remote who randomly would just disappear. I mean, in the middle of the day he would disappear for 4 hours and then re-appear and this came at times when we had full team meetings, came at times when we had product launches, it came at times when we had to have conversations and part of the problem, I realized when this kept happening, there were two problems. One, I realized I hadn’t really talked about that. You know, we talk about flexibility but we didn’t talk about what flexibility ultimately meant. It meant that you still need to see their results. It’s not that you randomly decide to leave for 6 months and then you come back. And the second thing that I did poorly was not to notice it right away and to talk about it right away. It actually, this is what actually prompted these weekly reviews during the initial 30 days because I realized that I have to be on the ball about things that are bothering me in the very beginning and I have to communicate that very effectively.

If I can’t set an expectation with you, then you have no idea why the work you’re doing isn’t making me happy and you can’t fix things. So the only way that I can get you to fix things is to tell you exactly what I expect of you and that works both ways. I want people to tell me what they expect of me as well.

It’s very critical, particularly with remote teams but critical of any employee. If they don’t know what you’re expecting from them, it’s really tough for them to get their job done.

Andrew: And it kind of relates to this document that you make available free on your site which is the Independent Contractor Agreement, which is what we would give to a developer that we might be working with on a short term basis and it’s highlighted section right here is where you say be clear about what you want out of this agreement, out of this relationship with the person you hired. You told me before that when you hire someone because the scope of their work is much broader, you’re not hiring them for small [??]projects, you’re hiring them to work full time for you, you can’t lay it out like this but you still want to be as clear as possible, you still want going in, even if you can’t put everything in the agreement, you still be clear with them about what you want.

Ross: Right. I give you an example, a concrete example of how this plays out. Because and we’ll talk about the flexibility in our company but we let people work from anywhere as long as they get their job done. And we talk about that during the hiring process that one of the things we value in our culture is this flexibility. If you want to travel, travel. If you want to take vacations, take vacations. We don’t count vacation days but we expect people to get their jobs done and all of us take vacations, we travel to some interesting places.

But one of the things that we also talk about is our expectation that there are times around product launches, around times when the site is performing badly, where we expect everybody to gear down and they’re potentially 80 hour work weeks. It is not our standard. We’re not a company that has as a goal that everybody works 80 hours but we also recognize that there are times when we have to work and fix problems and so we say that the flip side of the flexibility is there are going to be times when I’m going to look at you and say ‘I need you to help out’ and that may be in the middle of the night, that may be on a Saturday or Sunday and it’s something important for us to know that the people we’re hiring are willing to do that but more importantly I don’t even want to have to ask. I don’t even want to call a person and say we’re having problems, can you help me? That person needs to know we’re having problems and needs to tell me I’m there, I’m helping and I can proudly say that this is how our team works. When we have a problem, I don’t have to start finding people, they find me.

Andrew: And that kind of relates to this next point, actually, which is there’s always a way which is universally true, but it’s especially true with communication. You had someone who their Internet failed. Then what happened?

Ross: It’s one of the downsides of technology and relying on technology is technology fails. Before Crowdspring, I practiced law for 13 years and I can’t tell you how many times I was in a court room where opposing counsel was trying to rely on technology and it didn’t work and their case just fell apart because of it. So that taught me a very important lesson; don’t let technology drive what you do. So we ran into this problem a number of years back where one of our people literally just disappeared. We had no idea where they were. It was an important launch day for us. We were launching a product, they were kind of the lead on that particular product and we had no idea what happened to them the whole day. We could not launch. We spent a lot of effort trying to find them. We were worried.

Andrew: You missed your launch because of them?

Ross: We missed our launch because of it. When we got together the next day, they said, “Well, my Internet disappeared at home so I was waiting for it to reconnect.” This was somebody who was working remotely. It was aggravating to me because, first of all, I would have hoped this person would have found a way to communicate to us. But I realized, I never talked about this problem with the team. We never talked about what happens if you lose a connection and can’t communicate. If you and I are in the same office, we just look at each other and say, “We don’t have Internet. How can we get our jobs done?”. But if you’re sitting on the other end of the world and we haven’t talked about it, it becomes a problem. So one of the things we all agreed as a team is if technology was going to become a problem for us, like we lose Internet connect, we would find ways to communicate with each other, however we needed to; carrier pigeons, if necessary.

Andrew: The basic tool for you is Skype. But you say to them too, if Skype doesn’t work, then Google Text is your fall back.

Ross: Google Text, Google Voice…

Andrew: Google Voice, excuse me, which allows you to send voice mail and text.

Ross: SMS messages, call your sister, parents, ask them to call us, go to a coffee shop, etc. The thing is, it’s less critical for me that person than that who lost their Internet connection immediately finds another place where they can get their work done. Because if they lost their Internet connect, they may have lost power, they may have storms, I want them to be safe. I don’t care that they’re working for me, I want them to be safe. But what I need to know and what the rest of the team needs to know is that there is a problem, they don’t have Internet and what they plan to do about it. So what we all do right now when we lose Internet is we find a way to reach one other person and we say; here’s what’s going on, here’s what I’m doing about it, here’s when I expect to be online. This happened this morning. One of my engineers from outside the United States lost Internet connection. He immediately went to his neighbor and asked to use their phone to let me know that he was without Internet, that was going to get his power restored in 3 hours and that he was going to be online. He continued to work offline, but I didn’t have to wonder where they went. So that change made a big difference for us. Now there are no surprises. If something happens, as it always does, we are prepared for it. I would encourage everybody listening; if you haven’t had this conversation with your team, talk about it. It is so frustrating when you get to it and you haven’t talked about it. You can fix all the frustrations very simply by talking about contingency plans.

Andrew: That leads into the next big idea which is, implement collaboration. There are specific tools you use, which we are going to show, and you are always on the hunt for tools as you told us before. There was an issue that caused you to be aware of collaboration. There was an incident that caused you be aware of collaboration issues. Your staff is in Brazil, California, Europe, Chicago, and for long projects, you needed to make sure everyone fully understands what was going on. You know what I’m talking about?

Ross: We have had a number of instances. But one of the problems we ran into a number of years back, particularly with remote people who might be handling bigger chunks of a project or a project entirely on their own is that they might be working independently for weeks at a time if not months at a time. Because we have a small team, we are not supervising very closely. We try to hire people that don’t need close supervision. Part of the problem with people who are working independently is, everybody has different practices. If you’re working in the same office, it’s really easy to combine and say, “Hey, let me bounce an idea off of you.”. If you’re working in different parts of the world, across different time zones, you have some challenges. Sometimes, you’re not working at the same time or you’re not using the same tools. This was at a point where we were indifferent about collaboration tools. We didn’t practically reach out and figure out ways to collaborate. We kind of assumed that people would naturally find ways to collaborate. We had a situation where somebody spent a lot of time working on a project and after a month or a month and a half, it was time to demonstrate it. We all met as a team and they were demonstrating it and I looked and I said, “I don’t understand, what is this product?”, and they said “This is the work you asked me to do.”. I said, “No it’s not, this is not at all what we had talked about.” So it occurred to me that I did a bad job scoping out the project, if they misunderstood it to such a degree that they did something totally different. More importantly, I did a bad job making sure that we were keeping track of it along the milestones because there wasn’t an easy way for them to ask me questions. We were not in the same office, they were across the world, we work in different time zones and I.M. clearly wasn’t good enough at the time. So we said “We have got to do better. We need to find a way to be in the same place at all times that we’re working.”

Andrew: By the way, that is so painful. I’m such a worrier, I always think something is going to go wrong. Now I’m going to think, “Is a project being done and when I get to see it at the end it’s going to be completely out of touch with what I had in mind?” I’ll say what you said, which was, “What the hell is this?” But you now have a way of working that avoids this. I’m actually going to take the camera off myself and let you tell it.

Ross: So the first thing we did was looked for a good communication tool that would let us collaborate and that led us to adopt Campfire from 37signals, which is a phenomenal product that we love. There are lots of other companies that have these group chat tools, but this is the one that we prefer to use. We are all on Macs, and so we all use a program called Propane, which is a really nice Mac program for Campfire. Great program for Campfire. We have several rooms in Campfire; one is for the engineering team. Everybody who starts their day, signs into Campfire. That’s one of the expectations I set when I hire people is when you’re working, you need to be available in two ways, you need to be available on Campfire if you are an engineer and you need to be available by instant message if you are an engineer or in any other position in the company because we need to be able to reach other while we are working if we are not sitting next to each other. So we implemented Campfire, and we said to people, “If you start work, sign into Campfire. If you’re leaving to go to lunch or leaving for the day or taking a couple hours off because you want to go read a book or go for a jog, just say so, say ‘I’m leaving for a couple of hours, I’ll be back at whatever time'”. We made that part of our culture. I do this too; I start my morning my signing into Campfire. There are days when I don’t look in there and I don’t pay attention to the conversations that the engineering team has. There are days when I’m very actively involved with them.

Culturally, I still follow that practice where if I’m going to be away from Campfire, I have filters set so if they talk to me in that program, my computer tells me. If I’m leaving for two hours, I’ll say “Gone for two hours, I’ll be back.” This morning I had a breakfast meeting early in the morning and I signed on and said I’m going to be gone for a couple hours, I’ll check in when I get back at 9:30. So that’s one of the tools that we implemented that has helped us a great deal because that makes it a lot easier to ask. The one change we made from the way a lot of people use with remote employees, a lot of people use these kinds of tools only with remote employees but we work really hard to use Campfire with everybody. Even though I have engineers also sitting in my office, twenty feet from me, I try and ask much as I can to talk to them in Campfire. So that people working remotely know we are having the exact same relationship as I am with the people sitting next to me. It’s a very small thing but it’s so important to remote people to know that they are not being treated differently than the people sitting in your office.

Andrew: You also use other tools like Join.me. Why do you use, by the way, Join.me instead of Skype’s video screen sharing?

Ross: We used Skype for a long time for group conference calls. We have a small engineering team; four people and me. Skype ultimately, particularly after it was bought by Microsoft, just stopped working most of the time for us. The quality of the audio and video was very poor. For screen sharing it was OK but we couldn’t communicate, so we switched to Google Voice.

Andrew: Google Hangouts, right?

Ross: Google Hangouts rather, which has been outstanding for us. We actually use voice from Hangouts as well because some of the time we are remote, but not next to a computer. So there are times when I am travelling but still need to talk to the team so we bring people in by telephone to join those conversations. We’ll use the screen sharing from Google Hangout occasionally. We’ll use join.me. When we pair program, we’ll often use Join Me because we like using tools that work pretty well and that work all the time.

Andrew: Join.me does work so much better than Skype’s desktop sharing, which, unfortunately, just is not improving.

Ross: Yeah, what we found, Andrew, what we found ultimately when we picked technologies was we grew to rely on a technology to a point where when it failed, it paralyzed us. We didn’t know what to do. So we’re constantly looking for better technology because we never want to be in a situation where a technology fails and we don’t know what our next option is. We found Google Hangouts when Skype was failing. Skype is still a backup for us if Google Hangouts fail but we’ll also get on the phone and we’ll talk by telephone if we need.

Andrew: That happened to us too. That is so right that we used to just use Skype, Skype’s desktop sharing, which is just built in and everything’s great and I would just go into a meeting with it and if it failed, we’d scramble for a backup. We weren’t sure. We’d try to figure out how to get GoTo Meeting set up and then send one link. No more. Now we’ve got experience with a couple of programs. I’m not wasting half-an-hour to an hour where I try to get, when you get remote people together, it’s kind of tough. If I get them there, I don’t want the software to keep me from having that conversation and then have to figure out how to get everyone to stop what they’re doing and reconnect by video and voice.

Ross: And think about it. The earlier you realize that, the more work you’re going to get done because if you find, especially early on in life in your company, you’re spending half-an-hour tinkering with your software and hardware to have a five-minute conversation, you can’t get much work done. So we know if Google Voice isn’t working, we’re going to switch to Skype. If Skype isn’t working, we’re going to switch to phones. If that’s not working, we’re going to switch to text and if that’s not working, we’ll go to IRC, we’ll go there. We know that. That takes us five minutes to go through. Before, it’d be an hour, just like you said. We would spend an hour trying to figure out, “Why isn’t this working? Is everybody upgraded? Download the latest patch. Fix your microphone,” and we realized we were wasting time on the silliest things but that’s the reality of technology.

Andrew: Yeah.

Ross: Technology fails so have a plan so that you’re not hostage to it.

Andrew: All right. Next big point is you involve everyone, even if they’re halfway around the globe and when you say you involve everyone, tell us about movie night because this isn’t what most people expect.

Ross: So it’s really important to us that remote people feel like they’re a full member of the team. There are things that you cannot do to help that. You can’t physically have them in the same room. They can’t play ping-pong with us if we’re playing ping-pong.

Andrew: I used to love going out with my team just for drinks at the bar that was a block away from us, the W hotel in midtown Manhattan. You just sit there, you talk, it creates this friendship that then carries through to the rest of the week and the rest of your work together. You can’t do that with remote employees. It drives me nuts. I sometimes think maybe I should just fly out and see them in person but that’s not efficient and we can’t do it enough. So that’s why I was intrigued. Sorry. What it is that you guys do?

Ross: So there are a couple ways to do it. I’ll give you an example of what 37Signals does with their remote teams because they have people all over the world. Once a year, at least once a year, they bring them in to the U.S. for a meeting with everybody, for a three- to seven-day meeting with everybody. Now we’re a smaller company. We don’t have the budget to bring everybody in even once a year for that kind of a meeting and we hope at some point that we are able to do that because I do think it’s important. One of the things we try to do is find every opportunity to involve our remote people in the simple things that we do so on birthdays we typically will have cupcakes or a cake.

Andrew: What do you do? So if I work for you and it’s my birthday, you just send me a cupcake, is that what you mean?

Ross: Well, no. So if we have a birthday in the office, if we have a birthday outside the office we try to find a way to get that person something.

Andrew: I see. But you’re saying if I’m in the office and you’re giving me a cupcake that is what do you do?

Ross: If you’re in the office, I’m giving you a cupcake. I’ve got seven people that are not in the office and I want them to be a part of that so I can’t physically get them into the office so the next best thing we found was to get them all on a video chat on a Google Hangout or on Skype to get them all on the screen, bring the birthday person into the room, turn the screen around and we all sing “Happy Birthday”. Now, I can’t give the cupcake to the people that are in five different countries but we can include them and it’s a very small thing. It takes just a couple of minute. Yes, it disrupts their day. It disrupts everybody else but the reality is, it sends a very good feeling to the team and it makes them feel like they’re part of a team, as opposed to just doing a job that they were assigned to do. Any small thing that you can do to involve remote people. A month ago we had movie night at my house. I had the whole team over to watch a movie, and I cooked dinner for them. To everybody who is remote, I make the same offer. If you want to join us, we’ll try to find a way to get you dinner delivered, we’ll put up a video of you, and we’ll put you at the table, and we’ll sit you in a chair.

Andrew: They can watch from their laptop, or their iPad, or whatever, from wherever they happen to be, or their phones, and they get to kind of join in the conversation while they’re watching the movie with you guys.

Ross: Exactly. The quality won’t be great, but the thing is, just the fact that we’re trying to find a way to connect them to some of these activities goes a much longer way to show them that we really, really, love the work they’re doing and the value they bring to the team.

Andrew: That’s a big message. We’ve got one last point here I want to get to, but the big message I keep getting from the way that you hire and manage your remote team, is this sense of inclusion. It should just feel like we’re all in the same room together, and that means that there’s a campfire chat going on the same time, it means that we use video chat to talk or to watch movies together, but it should always feel like we’re in the same room, doing the same activity.

Ross: Yeah. One of the interesting things about culture, is I’m a big believer in that you can’t just legislate culture. You can’t say, we’re going to have this kind of culture, and all of a sudden you have it. Culture has to grow. The most that a founder, the most that a manager can do is to put in place an environment that promotes a particular kind of culture and rewards a particular kind of culture. We thought it was really important that inclusion was a big part of our culture. We made it as easy as possible for people to interact. We are very glad we did, because we think that really separates us from a lot of other companies. We don’t just talk about it, we live it every day. As a result, it’s one reason why we have such a small team. We can get a lot more work done with a small team working normal hours than our competitors can do with a team 3-4 times our size.

Andrew: Right. The final thing is, they get a lot of flexibility in times and hours, and you give them a lot of autonomy there, but the one thing you want them to focus on is the results. They get the results done on their own time wherever they happen to be, and because of that, who is this woman and what is she doing here?

Ross: That’s Bianca Jianti [SP]. Bianca is the head of our customer service team. Outstanding person, really fun. One of the things she said to us when we were extending a job offer to her when she initially started, and she started with us part-time, was, “I love to travel. Do you think I can continue traveling while doing this job?” This was very early on in the process when we were grappling with this question of remote work and how would it work, and we said, “Yeah, we’ll be flexible.” We care about you getting the work done. We don’t care where you are. If you want to be at the top of a mountain or on a boat in the middle of the Atlantic Ocean, as long as you understand that we need to get the work done, that you have a responsibility, that’s what we care about. Bianca every couple of months goes somewhere.

Andrew: Where is she in this photo?

Ross: That’s a photo from Kentucky. Well, in that photo she’s in California visiting her boyfriend. Every couple of months she’ll fly out and spend 3-4 weeks in California.

Andrew: So this is the Kentucky Derby? I interrupted.

Ross: That’s the Kentucky Derby. We never miss a beat because she continues to work her normal schedule. Now, she takes vacations, too. When she goes on vacation, she’s not working, obviously, but her vacations and her other travels are no different in one respect, she doesn’t feel restricted in her ability to do the things she loves to do because she’s working for us. She can pick up and go to Asia, and as long as she does her job, we don’t care. It doesn’t matter to me whether she’s sitting in the office next to me or sitting somewhere on a mountainside in a village. If she has a good connection, if she has the ability to get her work done, that’s all we care about. Happy employees are extremely productive, extremely loyal. I feel really fortunate to have a team of very happy employees.

Andrew: We started this program saying the benefit of hiring remote teams and managing them well is that you don’t have to limit yourself as a company to the few people who happen to be near you. Of course, the benefit also carries over to the people who work with you. They don’t have to be limited to sitting in your office every day. They can be wherever they are and still get work done. We’ve gone through a lot of points about how to do it. We’ve been really tactical here, but we also zoomed out and talked about the big idea, which is, of course, to keep everyone feeling like they’re in the same room, in the same project, sharing a culture. And, as a result of this, you were able to build your site and your business, Crowdspring. We know about Crowdspring as the place to go for logos, for graphic design. And, when we go there, we don’t end up with just one logo, right? What’s the process like? And then, I want to ask you for a suggestion for what we should be doing on Crowdspring. Before I let you know, I want to, at least, talk about that.

Ross: Sure. Thank you. So, we help small businesses and entrepreneurs around the world with logos, graphic design, web design, copy writing. And, it’s a different process. Rather than picking from bids and proposals, as you would do on many other sites, you post what you need, you set your own price, and designers–if you’re looking for a logo, for example–submit actual designs of your logo for your to choose from. So, it’s a very powerful way to buy creative services. Just like buying a television at a store. So, on a logo project, you might pick from a hundred or a hundred-fifty different logo designs. It costs you a fraction of what it would normally cost you, and the quality of the work is very high. And, here’s one very simple proof. We work with some of the world’s best agencies and brands. Companies like Amazon, Phillips, [?], who work with our community of 126,000 designers and writers. And, some of the most well-known entrepreneurs. It’s an interesting business model because it lets people get high quality, professionally designed [work?], for a fraction of the price, in days.

Andrew: And, it’s not just design. Oh. Zoom out. It’s also writing.

Ross: And also, writing. So, if you need a name for a company, a domain name, if you need web copy or marketing copy written, we’ve had books sourced on Crowdspring. Entire books.

Andrew: All right. Great site. Great business. Now we understand how you were able to put it together with such a small team. And, more importantly, for me, here at Mixergy, my audience knows how they can learn from your achievement and implement these ideas in their businesses. Thank you so much for teaching this.

Ross: Well, thank you, Andrew.

Andrew: Thank you all for being a part of it.