106: “I pay ALL my staff $210K a year”: How Geoff Roberts is transforming work

Join hosts Leanne Elliott, a Business Psychologist, and Al Elliott, a Business Owner, as they delve into a fascinating conversation with Geoff Roberts, Co-founder of Outseta.

In this episode, we explore Outseta’s unique compensation model, where all employees earn $210,000 per year, have flexible work schedules, and receive equity at the same rate as the co-founders.

Key Talking Points:

• Introduction to Geoff Roberts and Outseta
• Geoff’s background and experience in SaaS and membership businesses
• The concept of Outseta’s “choose your own adventure” compensation model
• Detailed explanation of the $210,000 annual salary for all employees
• Benefits and challenges of this compensation model
• Impact on employee motivation, retention, and company culture
• Geoff’s insights on flexibility and autonomy in the workplace
• Advice for other business owners considering a similar approach
• Future plans for Outseta and Geoff’s vision for the business

Resources

All the links mentioned in the show.

LinkedIn: https://www.linkedin.com/in/geoffrobertsmarketing/

Outseta Website: https://www.outseta.com/

Follow Geoff on X: https://x.com/GeoffTRoberts

Connect with your hosts

• Connect with Al on LinkedIn 
• Connect with Leanne on LinkedIn
• Join the discussion about this episode on LinkedIn
• Email: podcast@TruthLiesandWork.com
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• Chat with us on Twitter @truthlieswork
• YouTube channel for the podcast @TruthLiesWork
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The Transcript

⚠️ NOTE: This is an automated transcript, so it might not always be 100% accurate!

Leanne Elliott: Hello and welcome to Truth, Lies and Work, the award winning psychology podcast brought to you by who? The Hubsbox Podcast Network, the audio destination for business professionals. I’m getting so excited. I’m losing my headphones. My name is Leanne. I’m a business psychologist.

Al Elliott: My name’s Al and my headphones are securely fastened.

Leanne Elliott: And we are here to help you simplify the science of whack.

Al Elliott: This is the Thursday edition Tuesday edition. We have the news roundup, we have the workplace surgery, and we also have a new segment called the Summer Book Club. But Thursday is all about interviews. We have a fabulous guest today.

Leanne Elliott: We do. Today’s episode is an interview that actually came about when Al saw a random tweet a few weeks ago.

What do you call them now, by the way? That’s X.

Al Elliott: I think, I think, I think Mosque wants us to call them posts, but we’re still calling them tweets.

Leanne Elliott: Good for you.

Al Elliott: I’m always going to call it a tweet. Talking of these tweets though, Jeff Roberts from Outsetter, he posts about a tweet about his salary structure and I couldn’t quite believe what he was saying was right.

I’m not going to spoil the story, but basically everyone from founder to junior developer gets 210, 000 a year can work as much or as little as they want, can work from anywhere in the world and can earn equity at the same rate as the co founders.

Leanne Elliott: It is that kind of thing that That’s gonna, it’s perfect for the show because it intrigues Al from a business owner point of view and it really intrigues, intrigues me from a business psychologist point of view.

This is essentially though a founder story. So while we will be pitching in where we feel we should, we’re focusing on Jeff and we’ll be diving deep into Jeff’s background, his motivations and his experiences as a business leader. Jeff started off at a company called Buildium, which ended up being acquired for 580 million.

At the time, Jeff was head of marketing. So he and one of the Buildium co founders started Outsetter, which is a membership software startup that helps clients monetize websites, software products, and online communities with a few clicks. So let’s join Al in the studio where we meet Jeff for the first time and find out why he wanted Outsetter.

To be a very different type of organization.

Geoff Roberts: My name is Jeff Roberts. Uh, I am talking to you today from San Diego, California. Uh, and I am a co founder of a SaaS startup that’s called Outsetta. Um, today I think we’re going to dig into a lot about our sort of organizational model and compensation model that that’s kind of what piqued Al’s interest.

Uh, but generally, um, I’m a non technical person. Tech founder. Uh, I have a background in, in marketing, uh, and I’ve been bootstrapping this business outside of for the last seven and a half years.

Al Elliott: You’re right. We will be getting onto your organizational structure and particularly your remuneration structure in a second.

And so just give me the story. How did you start from building them? 10 years ago to where you are now.

Geoff Roberts: Yeah. So I, um, I never envisioned that I would work in tech, to be honest with you. I, uh, I went to college and was a writing major. I thought for a long time I would write for sports illustrated or a newspaper or something like that.

Um, long story short, uh, got out of, uh, college. My undergrad in 2008, right. As the economy was tanking and didn’t really know what else to do. So I went back to grad school and got an MBA, uh, the combination of sort of the writing degree and the business degree, um, lent themselves pretty naturally to marketing.

And long story short, I was struggling to find a job. I got hired as the first full time marketer at a SAS startup called Buildium in 2010. Uh, if I remember. Being honest, it sounded terribly boring to me, but I needed a job. So I took the position and long story short, I stumbled into a great situation without even recognizing it.

Uh, at the time it was a very small company, six, seven, eight employees, something like that. They had found product market fit. They had a very talented technical team and they had no idea how to do marketing. So they took a chance on me. Uh, I sort of, uh, fell in love with the challenge of growing a startup and was giving a lot of permission to try things out and, Sometimes fail sometimes succeed.

Uh, but we had a very successful run at that company. I led the marketing team for five years. Um, it ultimately culminated in a 580 million acquisition. And during the course of the time that I was at Buildium, I was sort of the annoying business person pulling on the shirt sleeves of the co founder of the company.

His name is Dimitri, uh, saying, We need to integrate Stripe with a subscription management system with HubSpot, with Salesforce, with Zendesk, with ChartMogul, with all these different software tools that were required to run the business. And Dimitri, uh, was the CTO of the company. He eventually got exasperated with me and said, you know what, I’m spending more time integrating software than I am building our actual software.

Why isn’t there some way to do that? To launch a SAS business. That’s easier than this, where you get sort of all the core tools that you need to launch a subscription business in a single platform and the parallel that a lot of people like is if you wanted to launch an e commerce store, Shopify had made that quite easy.

There wasn’t anything similar for, for SAS or membership type businesses. So that’s where the idea for outset really came from. And we built a homegrown version of what’s become outset up. And used it in the context of that business building and scaled on that sort of homegrown tech stack until we were a 5, 6, 7 million dollar a year business.

After the exit, when we were looking to work on something new, we sort of looked back at our experience and said, you know what, that tech stack that we built for our own use, there’s nothing like it out there. All of these founders of SAS businesses are still cobbling together all these tools. Why don’t we make this our next venture?

Uh, and that’s where Outsetta came from.

Al Elliott: Tell me about this freedom you had at Bildium. Um, is that something that you just took that idea and went to Outsetta with? Did you make any modifications?

Geoff Roberts: Um, certainly I think when I reflected on my own experience at At Buildium and Buildium had, we’ll get into the nuance of all this in a minute, but Buildium had a much more traditional organizational structure.

Um, you know, there was a CEO and the departments that you typically see in a tech company today and management layers and, and all of that. Um, but when I looked at my own experience at the company, something I realized was I was rabidly loyal to that business and rabidly loyal in terms of working hard on that business and feeling like it was my own, even though it was not.

I mean, I, I was issued a small amount of equity in the company eventually and whatnot, but I didn’t co found the business, but it meant something to me. And I, Invested my time and energy in it as if it was my own. And I started looking at why that was, and there were a number of factors. There was certainly the freedom that I was given in the workplace to sort of find my own, you know, zone of genius or, or sort of, um, Learn and develop my own skillset.

But there was also the way that I was treated as a person outside of just what I could contribute to the company. I was treated abnormally well, frankly, and given a lot of freedom to do the types of things that I wanted to do in my personal life that I didn’t see a lot of other companies, um, sort of.

Granting to their employees. And I think I realized very quickly, I was in a situation where I could learn a lot from these people. Um, and I could help build this business and I could accelerate my career and all of those things. But they also genuinely gave a shit about me. Outside of work and a combination of those two things created an element of magic, not just for me, but for a lot of other people that, that worked at Buildium.

And that became very important to me and something I wanted to sort of carry forward to outset to the extent that I would say building a company that serves our employees. Is my primary objective at Outsetta. There’s people that fall in love with the problem space or the technology or, um, you know, the idea of growing a 100 million dollar business or whatever it might be.

None of that is me. Uh, I view the business very much through the lens of, we need to create. So let’s talk about this cache, because the post seemed to say to me, um, we need to learn to serve our customers very well, because that is a prerequisite to providing the sort of opportunities to our team that I want to, um, and that is point blank, my, my motivation.

Al Elliott: So let’s talk about this cache because the post seemed to say to me. You pay everyone 210, 000 a year. And they can choose what days they want to work. And they also earn equity. What have I, it sounds ridiculous. What have I misunderstood?

Geoff Roberts: Yeah. So, so you hit the, uh, you hit the three pillars on the head. Um, and I would say.

Before we kind of get into all those pieces, it comes from a place of we wanted to keep Outsetta intentionally small, uh, and that comes from a place of in our previous company, Buildium, we took sort of the traditional VC route, raised several rounds of funding, grew very quickly. Had a great outcome. It was a great place to work.

Like this was not a negative reaction to that path whatsoever. We just looked back at our experience and said, you know what? It was so fun when we were a company of 20 and it was a little bit less fun when we were a company of, of 200. And I think everybody who’s been through a startup that Sort of goes on that trajectory has that same realization.

Um, it is, there’s just less politics. There’s less, uh, administrative burden and all those kinds of things when you’re a smaller company. So we started from a place of, we want to build a successful tech company. Let’s sort of put an arbitrary. An arbitrary head count of about 20 people alongside that goal and say, we’re not going to grow past 20 people.

We’re going to see how far we can push this company with 20 employees. And that’s what we started from. And from there we said, okay, we’re not going to be able to throw head count at, at our problems. How are we going to do more with less? And the first thing we recognized was we’d have to hire great people.

So two things fell out of that. A, the salary, 210, 000 a year is not any sort of magic number by any means. We largely just plucked it out of thin air. But we said that’s a good pay rate that we think a lot of excellent people will be very happy with. Let’s start with good compensation. The second piece was just flexibility.

Um, we think entrepreneurial minded people are going to thrive at Outsetta and these excellent type of people that we want to hire almost always have options and sometimes they might not be ready for, uh, a full time job, but if we can get them in, A day a week, 2 days a week, 3 days a week. I’ll take that great person working it out all day long.

Um, so those 2, the flexibility and the pay were just point blank, like how do we attract, uh, really excellent people that, that frankly probably have other opportunities. And then we said, okay, we need to bring these great people into the company. We’re going to be small, so they don’t really need to focus, uh, on management, but we need everybody to act like an owner.

We need to empower autonomous decision making we need, you know, without. Management to just kind of set people free and allow them to contribute in the most impactful way possible. How do we get people to act like an owner? Why don’t we just give them actual ownership in the business? So we very quickly sort of backed into this idea of, to a large extent, like everybody’s a co founder in the business.

We, we still use the term co founder to refer to the three of us that, uh, Technically got together and started the company, but there’s no difference in how we’re treated versus anybody else. It’s the same equity structure, the same pay rate. Nobody’s anybody else’s boss. So the idea is this structure is appealing to people that are typically Transcribed A little later in their careers, um, they’re seasoned, they’re experienced, they’re, you know, intrinsically motivated and also motivated by the actual ownership that we give them quite liberally.

Al Elliott: I want to ask you about the equity structure, and I don’t know how much you can say. So how much can you tell us about how the equity structure works?

Geoff Roberts: It is, it is ridiculously simple. Um, and if you go to outsetter. com slash blog, at the end of every year, we publish a post, which is sort of a year in review post.

And we actually show you the ownership that everybody holds in the company as well as all of our, uh, expenses and stuff like that. Um, but the way that it works is every employee in the company can elect to work as many days per week. To earn equity in the business as they want to. So let’s say just a simple example across all of our employees, a hundred days have been worked for equity and outset at all time.

And if I’ve worked 15 of them, I own 15 percent of the company. That it’s literally that simple. So the idea is it’s overtly fair. The extent to which you choose to work for ownership in the business is the extent to which you, you own the business. And we’ve seen drastically different flavors of this. So there are two examples I bring up a lot.

Uh, the first is our design lead. His name is James. He started working with us in a very, very, very, very, very part time capacity, 20 hours a month. And when he started, it was back in 2018. We didn’t have the money to pay him for most of that time. So we compensated him at least half an equity for the time that he spent working on Outsetta.

But again, that’s like 10 hours per month, a really, really small amount of time still over the course of three or four years. Uh, working in that very part time capacity, he built up an ownership stake and outset it of about 4%. Um, and then eventually we just ramped him up onto a paid compensation plan for the most part.

Um, but if you look at the time that he invested in the company to get a 4 percent ownership stake, a 4 percent ownership stake, if you’re not very familiar with how tech companies work, is enormous. It is larger than lots of tech companies. CEOs typically have, um, in the tech companies that I’ve worked for previously as a VP, I typically got like a half a percent equity in a business.

So a 4 percent stake for working part time is huge. And we have another employee named Bernard. Who did sort of the opposite. He came into the company. He said, I believe in what you’re doing. Um, he’s later in his career, he had some financial stability and he said, I want to work almost entirely for equity to start.

And in 2 years, uh, he built up an equity stake of about 14, 15 percent in the business. Uh, which again is this huge equity stake and a lot of people say, hey, that that’s nuts. That’s crazy. But we’re not giving equity to investors. First of all, we’re giving it to our team instead. And the other lens through which to look at that is we got extremely talented engineer, 25 years of experience had been CTO at other very successful companies.

Working for us for two years without really paying him much at all. Um, so you just have to kind of weigh the, the benefits versus yes, we’re, we’re issuing equity liberally. Uh, but I would argue it’s one of the best investments we’ve made in the.

Leanne Elliott: The idea of freedom and ownership is an interesting one.

And I would want to help you, the listener, separate the what from the why. So giving equity share is the what that’s being done here. If we understand the psychological impact this initiative is having on employees, the why, then we can look at alternatives that may work better for your people or for your business.

So let’s quickly cover some of the main psychological principles at play through the lens of equity ownership and Jeff’s entire approach to compensation. First equity theory. So equity theory argues that employees are motivated not only by absolute rewards, but also by fairness in the distribution of rewards relative to other people in the organization.

So fairness is what employees are responding to, and there are other ways to do this. For example, profit sharing programs where employees receive a share of the profits can drive an equal sense of ownership and fairness across the company without distributing actual equity. Okay. Jess model also allows for autonomy and flexibility.

So employees have the freedom to make decisions and manage workloads. Autonomy is a key driver of intrinsic motivation, or how much effort we want to put into our role. And this is the basis of self determination theory. So self determination theory suggests autonomy is a fundamental psychological need.

And when this is satisfied, individuals experience greater motivation and wellbeing. And this leads to higher job satisfaction. And productivity, offering equity is a great way to empower this autonomy as is flexible working agreements. So enabling employees to design their own work schedules and choose where their working locations will be, will have the same impact on employee behavior and performance, As equity share would.

So we have fairness, autonomy, and flexibility. Some of the why’s behind the what. But if there is one word I want you to remember, it’s control. Jeff’s approach to working patterns and compensation gives his people control. And the psychological impact of perceived control is very, very powerful.

Psychologists separate control and detection. Two main categories. First is the internal locus of control. So individuals with an internal locus of control believe that their actions and decisions directly affect the outcomes of their lives. They feel responsible for their success and failures. In a workplace setting, these individuals are likely to take initiative, seek opportunities for professional growth, and feel more satisfied with their careers because they believe they can influence their progress.

The second is the external locus of control. So people with an external locus of control believe that external forces like fate or luck or other people like their boss have a greater influence over their lives than their own actions. Psychologists have another word to describe these employees, disengaged.

If you’re ever frustrated as a business owner, that your employees aren’t proactive, they’re lacking passion, enthusiasm, or just don’t seem to care, it’s probably because they believe they lack control. As you listen to the rest of the episode and the incredibly inspiring work that Jeff is doing, try and reflect on the psychological principles that are sitting behind his ideas.

And when you’re assessing an idea or an intervention, ask yourself, will it provide my people with a sense of fairness? autonomy or control. This is your why.

Al Elliott: So we now know the what, we know the why. Cool idea. But at this stage, I still didn’t quite get it because it seemed like as a founder, I’m, if I use this Jeff system, seem like as a founder, I’m giving away my own equity.

So I had to ask Jeff, what was I misunderstanding about the equity structure and how it all worked? I’m confused though, because Does that mean then if I came to work for you and I put in, I put in 80 hour weeks and I really, really did everything, am I taking equity from your share then to get my percentage?

Geoff Roberts: Yeah, so the equity is a moving target with this model, uh, because the, the sort of the, um, denominator is always going to be, uh, The total number of days worked by all employees, all time for equity. So every day that number moves as long as more people are working for equity. So if 100 days have been worked for equity today, maybe tomorrow, it’s 105 or 110.

Um, so it is a moving target. What that means is. If an employee stopped working for equity altogether, but other employees kept working for equity, their ownership stake would erode a little bit over, over time. Um, and, and that’s okay. That’s. Just how the model, the model works. Um, it actually, from a business perspective, gives us some degree of protection in terms of somebody can’t just come build a huge equity stake and leave and retain all that equity.

They would, you know, retain a percentage that is reflective of how much time they chose to work versus all of the other employees, all times

Al Elliott: fast forward 10 years, it’s a 580 million dollar exit. And your friends are going, Jeff, what the hell have you done, mate? You’re getting 15 percent of this and some dude is walking away with the same.

How would you, how would you talk to your friends and tell them that they were wrong about this?

Geoff Roberts: Yeah, I think there’s, there’s two things there. Um, one is if this other dude is walking away with the same, the same 15 percent that I am. That means that dude made the same sacrifice that I did. And in terms of the amount of time.

He invested in building the company, uh, in lieu of paid compensation to earn, to earn equity in the business. So although I am the co founder, uh, you know, quote unquote, the sacrifice that that was made for that ownership was absolutely the same. And my mindset is that employees should have the same financial windfall, the same benefit on account of, uh, making the, you know, the same investment in the business, uh, Point blank.

Aside from that, I think the other thing, uh, people, people tend to look at is you’re issuing equity. So Liberty, so liberally that yours equity stake as a founder is smaller than what you would see with other founders in a more traditional structure. That is, that is generally true. I’m not going to say that is not true, but we’re also deliberately not raising funding from investors, which.

Even in the case of building them, um, you know, that’s going to dilute the founders and how much ownership the founders actually have. So there’s not going to be dilution from an outside investor. There’s only going to be sort of dilution from other employees that have devoted their, their time and invested their time in growing the business.

And, uh, I personally feel. Much better being diluted by teammates that we’ve brought into the team that are contributing every single day to the growth of the company, much more so than I would being diluted by somebody that’s just writing a check and handing it off to our business.

Al Elliott: You’ve just, you’ve almost answered the next question I was going to ask you, which is, so do you have an opinion about.

VC companies. Do you have an opinion about people who do take on funding?

Geoff Roberts: Yeah, I, I think in general, um, there is way too much polarization of opinions around bootstrapping versus taking VC money. Uh, Versus any of these decisions about how you finance a business. Um, I think it’s all nonsense. I think there’s a, there’s a time and place for all of these different routes.

And I think people have turned this into this. The sort of tribal discussion and pick a side and take a side. And you’re either a bootstrap or a VC founder, but to me, it’s all about harmony and harmony in terms of how you finance your business, what your goals are in the business, the type of product you’re building, um, what you want to get out of the experience of building the company, all these things need to be in harmony and, uh, I’ll give you some examples.

So. If you want to build SpaceX, you’re not going to bootstrap it. It would be, even if you’re Elon Musk, you’re not going to bootstrap it. You would need hundreds and millions, if not billions of dollars. This is this crazy idea with massive upside. You’re going to need all kinds of expensive equipment and engineers and blah, blah, blah, blah, blah.

You would be. out of your mind to try to bootstrap a business like that. That is a venture track company that is a big ambitious swing where you’re going for the biggest possible outcome as fast as you can. And you need to run the business that way. At Outsetter, we’re going for much more of a, of a calm company.

We know we want to stay small. Um, we know we need to attract great people. So we’ve built. All aspects from how we organize ourselves to how we finance the company, um, to support our objectives with the business. And to be fair, there are some things we, we haven’t gotten right. Um, I am the first one to tell you that Outsetta is probably a bigger product than we should have tried to bootstrap.

Uh, it’s really, To get into what the product is more than we’ve discussed so far. It’s a CRM, it’s a billing system. It’s an email tool. It’s a help desk. It’s basically a platform that brings together all these tools needed to run a SaaS or membership type business. But that means it’s really like four or five software products as opposed to one.

And it took us a lot longer to sort of get the business to default alive then. It might otherwise, if we had bootstrapped something smaller. So we were sort of out of harmony there. We tried to do something probably too ambitious for a bootstrap model. Uh, we’ve made it work and like, we’re benefiting from that now, but we had a really hard first four or five years in business, um, as a result of those.

Components being out of harmony. And I think that is the takeaway that I want to talk about. I want to preach about, I want to encourage other founders to think about is what’s the product that you’re trying to build. How do you want to build your company and how do you make everything else in alignment with those objectives?

Al Elliott: So I just want to make sure I’m getting this straight because there’s, there’s, there’s a third aspect I’ve not even touched on yet. So first of all, if I came to work for you, I could work for you for essentially very small, um, very small, Pay very small salary, but for every day I worked, I took a percentage of equity in the company.

So that’s option number one.

Geoff Roberts: Yep.

Al Elliott: Option number two. So that’s basically self regulating because if I did seven days a week, as opposed to one, I get seven times more. I get that. Then the other option is I maybe don’t take any equity, but I decide I’m going to take a fraction of the 210, 000 divided by five.

And I say, I’m going to work three days a week and that’s, and I’ll earn, what’s that? A hundred.

Geoff Roberts: Three days a week is 120, 126, 000 a year,

Al Elliott: right? So I can do that. That’s correct. Is it?

Geoff Roberts: Yep. You can work anywhere. You can work as much as you want and you can choose the mixture of cash and equity that, that works for you.

So we call it kind of a choose your own adventure compensation model. And the idea is every employee can come in and say, based on my life circumstances, based on what I know about the business, here’s how much I want to work. And here’s the mixture of cash and equity that works best for me. Um, So, just as an example myself right now, I actually kind of blew up the model a little bit, but right now I’m working 3 and a half days for cash compensation in Outsetta and 1 and a half days for equity.

So I work a 5 day work week, but. 3. 5 days out of that is paid 3. 5 days is for equity. I make a salary of 147, 000 a year and then I’m building continuing to build my equity stake the other day and a half. Um, that’s what works best for me. I’m the youngest of the 3 co founders. I have a young family. I’m not.

Financially wealthy on my own beyond this, um, 2 of my co founders are at a different stage in their life. Um, they have a little more financial stability and they are both, uh, prioritizing the equity component a little bit more than I am because that is what fits their, their stage of their, career. And our whole team does this too.

Um, we’ve got somebody else who works on Outset at two days a week. She does one day paid, one day for equity. Um, it’s all kind of a mix of what works best for you.

Al Elliott: This is so incredibly Simple, but I don’t understand why someone hasn’t done this before.

Geoff Roberts: Yeah. I think there’s a, I think there’s a few things that keep people from doing this.

Um, I would say there’s more people experimenting with. Similar models. And I think you’re going to see that continue to grow, which is good. And one of the reasons that I, I talk about this, I think this is such an opportunity that people innovate a lot in terms of like what they’re building, but not how they’re building their companies.

I think the media in general, and particularly the tech media, like if you go watch the movie, the social network, the. underlying message is if you’re a founder, you should hold on to every scrap of equity as tightly as you possibly can. And it’s almost a game of how little ownership can you give up so that when you do have this, uh, exit event should want to occur, you make as much money as humanly possible, and there’s nothing wrong with that.

I have no problem with people that choose that route. That is a deliberate decision to. Maximize their personal potential outcome by holding as much equity as possible. I would say, obviously we’re on the opposite end of that, but the way that I would look at it is that founder has to work with other people that they cannot incentivize with equity to nearly the extent that we can.

So whether that’s contractors or hiring people onto their team, um, I would argue they can’t recruit the same level of talent that we are able to with our structure. And the bet that I am making is equity only holds value if you, if you build something of value and getting the right people on the team Is one of the best ways to ensure that you build something valuable.

I want the best possible people on our team that I can get on our team, and I’m happy to give them equity in order and good pay and flexibility and all these things in order to get them working with us. I think that increases our odds of success dramatically and from my perspective. I’ve always looked at it like let’s say we sell outside of someday for 50 million.

In my mind, that’s a phenomenal outcome. I would, I would die happy and that would be great. Um, I would feel really weird if I walked with 48 million and distributed two to the rest of the team, um, to me. Sure. What I. Want the 48 million. Of course I’d want the 48 million, but, but that would feel weird to me, especially when I had people that worked, uh, with, with me over the course of a long period of time to not see them reap those same rewards, I would be much more comfortable and honestly, much more excited if I made 15 million and 35 million went to the rest of the team to me, like, think about the difference.

In celebration, uh, when that occurred, think of how awesome that would be to celebrate with the team that all participated that materially in the success of the business. That’s the day that I want to work towards.

Leanne Elliott: Pretty cool story, but we’re about to really start putting the pressure on Jeff. Join us after the break to find out if this structure actually works in the real world.

Welcome back. Let’s get back to giving Jeff a hard time. Shall we? Al, you had some concerns at this point, didn’t you?

Al Elliott: Yeah, you can’t help but like Jeff because he’s so enthusiastic and he’s so selfless as well. But my tiny little brain couldn’t quite get around this obvious problem. Why does everyone get paid the same?

But some tasks require much more expertise than others, for example, customer service compared to being a senior developer. So I wanted Jeff to explain how they get around this. Okay. for a second and go, one second, Jeff, we’ve got, let’s just use argument sake, 10 people of 2. 1 million. Um, and my revenue is, let’s say 5 million.

And we’re like, yeah, but we need this. We need someone just to do this. tech support. Sorry, not email support. It’s just literally email support. We need to do it. Jeff, you’ve got to spend all our budget. So what do you tell me? Where’s the money coming from to pay for that?

Geoff Roberts: Yeah. So this, this is a circumstance we have very directly in, in our business.

We have these lower level tasks that still need to get done. And we’ve looked at. All of these things through one of two lenses. Um, one is, is this something that we can outsource to an external contractor that is not part of our full time team? The other is, is this something where we can divvy up the responsibilities amongst the full time team?

And, and we’ve done, um, certainly a bit of both. So when it comes to support specifically, we are a support intensive team. Business, to be honest with you, it is a big project or a big product. Um, there’s lots of different integration points. We integrate with all sorts of different technologies. We have a lot of support, particularly early on in the customer life cycle.

And we knew we couldn’t just go out and hire sort of junior level, um, customer support reps, and we saw inefficiency in doing that anyways, you’ve, you’ve interacted with such people. They don’t. Have the ability to solve your problems in most instances. They’re sort of just. saying, Hey, we’ve received, you know, your incoming customer service requests, and they route it to somebody else who can actually solve the problem.

So we said, let’s just cut that layer out altogether. And the primary thing that we do in this regard, we, we actually do both of the things that I mentioned, but Everybody on our team does support every single person. Um, all of the engineers, myself, everybody else, it’s non negotiable. We tell everybody this upfront.

If this is a problem for you, then you’re not going to work at Outsetta. This is just part of the gig. And you can argue that there’s downsides to this. We have. Extremely senior software engineers that are hugely valuable employees spending some of their time doing customer service. You can tell me that is not the smartest thing to be doing financially.

I think there is certainly some truth to that, but the flip side of that is. Every single person on our team is confronted with our customers issues every single day. And I think there’s so many positives that, that come out of that. It’s actually been a pretty beneficial to the business from a customer service perspective, really believe that good customer service comes from interacting with people.

Um, this is a little bit like my, this is a little bit of my personal. Um, opinion slash baggage, I guess, like I’ve never had a good support interaction with a chat bot, frankly. Um, so I, I, I think customer service and, and delivering competent customer service from a person is only going to become more of a differentiator going forward.

I do think there’s a time and place for AI tools where. You know, you can talk to them and interact with them and, um, have some dialogue with them back and forth. But ultimately when you need serious help, it should come from a person.

Leanne Elliott: I can definitely see how this would work, but I have a feeling you, the listener, have one thought on your mind.

It’s fine for Jeff and his co founder. Their last company got acquired for 580 million. Can this work for us normal folk? Let’s rejoin the interview where Al asked exactly this.

Geoff Roberts: The question I always get about this is everyone’s like, Oh, you’re, you’re independently wealthy or that exited building was significant enough to you that you don’t need the cash and it doesn’t matter.

And, um, this is just like, you’re running your business as a charity. That is not true at all. Um, I. I am not financially wealthy by, by any means or any, any serious means, um, I’m reliant on my paycheck from Outsetta to pay my bills even still today. So it doesn’t come from that place. Um, certainly an influence That led us to have all these discussions about staying small and drove us towards the structure was a book called Reinventing Organizations by a guy named Frederick Lelew.

Um, that book talks about an organizational design called self management, which we’ve also adopted, which basically means there’s no bosses, there’s no hierarchy in a company. You hire a smaller number of people, you sort of empower them, um, and that book became very impactful to us early on, both myself and Dimitri and The rest of our team read it and said, okay, there’s something here.

If we want to stay small and we don’t need this management layer, and we need to hire great people. This is a way that we can organize ourselves and work, um, to make all those, all those things possible, all those things true. So that was part of it. Certainly. Um, just the appeal of this way of organizing ourselves.

Um, I think. More on a personal level for me. Um, I want to reiterate that I, like, I want Outsetta to make me a lot of money. This is not, this is not demonizing making money whatsoever. Um, that is an objective of mine, point blank. I want this thing to make me wealthy. Um, but I think I am a person that has a good relationship with the concept of enough.

Um, I would, I would also say I have expensive tastes. Like there’s plenty of expense. I like fancy food. I like traveling a lot. Like I know how to spend money. If I, if I have it, there’s lots of things I could spend money on. Um, but I’ve always had a. sense of, is there really a difference between 20 million and a hundred million?

Like if I made 20 million, I know for a fact, I could live a lifestyle that is ridiculously good and, and rich and whatever you want to call it. Uh, I don’t, I don’t need the hundred. Like, yes, it would be nice to have an extra 80 million in your bank account, but I just get 20 million. Fired up more by the idea of if we could distribute that to everybody else on this team and everybody else could have, uh, sort of a really impactful, um, event for their, for their lives and their personal wellbeing that allows them to do the sorts of things that they want to do with their lives.

Um, that just gets me more fired up. And I, I actually think about this. If we, if we do ever sell the company and this sort of financial windfall occurs, I really think it would be so much more fun if, you know, you made everybody multi millionaires as opposed to one person and everybody else got like a Christmas bonus.

Um, that, that’s kind of a mindset that has, uh, permeated a lot of things in my life. Um, I know, I know what I want. I know, when enough is enough. And I know the things that matter to me and try to prioritize those.

Al Elliott: What an incredible story. I recommend you go and follow Jeff on Twitter or go to the Outsetter blog.

The link is in the show notes. Jeff’s unique outlook on life would lend itself perfectly to a podcast and guess what? He’s launching one in the next few weeks. Here’s some more information on it. Your podcast is called Life Profits Podcast, and it seems to be It seems to be about this idea that there is enough that you balance profitability, money against life.

What have I misunderstood?

Geoff Roberts: You’re, you’re, you’re totally right. So the podcast, uh, first of all is upcoming. It’s not out yet, but it will launch this summer. Um, and the, the phrase, Life profits are life profitability is not mine. Um, it actually comes from the co host of the podcast. He’s a guy named Addy Pinar.

Um, but he wrote a book, which was also a huge influence on, on me that kind of. Put language to these ideas that I’ve been talking about for a while. And the concept of the book, it’s called life profitability. If you want to check it out is as entrepreneurs, every entrepreneur, including myself can tell you.

From a financial perspective, exactly how well their business is doing at any point in time. We look at this stuff obsessively. We check Stripe. We know what our revenue of our business is every year. We’ve reviewed the financial performance of the company quarterly, whatever it might be. We do not do this same level of accounting in terms of The extent to which our business does or doesn’t enrich our lives.

And from my perspective, the entire point of entrepreneurship should be to enrich your life. There are instances where maybe that’s not true. And. Um, maybe you’re working on something, you know, far larger than yourself. Um, and, and that is not true, but I think in most cases, people go into business to try to enrich their lives.

And when I look out my window, I see a lot of miserable founders that are depressed. They’re working crazy hours. Um, they’re always stressed. And Addy’s book made me pause and think, and number one thing that came out of reading his book is throughout the seven years I’ve been working at Outsetta, I will check myself every month, every couple of months and say, how much is this experience actually enriching my life right now versus making me miserable?

And the key part is it shouldn’t be like entrepreneurship should just always be delivering bliss to you because that’s not. Reality either. Entrepreneurship is hard. You’re going to have high periods and low periods, but if you’re not looking at whether this business that you’ve created is actually making your life better, you’re sort of missing the point.

So, um, that is something I have. Made a much more deliberate, um, attempt to sort of check in on with myself from, from time to time and course correct to the extent that I can, because ultimately I want the business to support a life that I’m excited about and that our employees are excited about. Um, and that’s the primary KPI for me.

Leanne Elliott: Thank you so much, Jeff. What an incredible, incredible story and so much great inspiration. And I think definitely one to, to reflect on and think about how these overarching principles might work well in your business. Do subscribe, join us on LinkedIn where the conversation continues between episodes.

Subscribe for our new LinkedIn newsletter. That’s very exciting too. Um, anything else? Follow, follow, subscribe, subscribe. Done.

Al Elliott: Yes. And join us on Tuesday for our world famous weekly workplace surgery and a news roundup. On Thursday, Lee, who are we speaking to?

Leanne Elliott: Yes. Join us on Thursday. I’m very excited about this.

We will be talking to Dimple Dabhalia. She is founder of Roots in the Clouds, an author, a coach. She will be talking about her cutting edge work, supporting a holistic approach to addressing organizational trauma and moral. Injury often experienced by people working in industries with high emotional labor.

So things like humanitarian or health work, it really is a fascinating, fascinating conversation. So many practical tips for business leaders, for employees. You do not want to miss it.

Al Elliott: Thanks again for joining us. We will see you next week for lots more good things. Don’t forget we’re on LinkedIn. If you’re enjoying the, continue the conversation, you’ll be speaking to Leanne.

Go search LinkedIn for truth, lies and work. And as Leanne said, brand new newsletter, exciting stuff. Bye.

Leanne Elliott: Bye.

Al Elliott: Bye.

Leanne Elliott: Which is a membership software startup that helps clients, which is a member, which is a memberware, memberware, memberware,

Al Elliott: memberware,

Leanne Elliott: memberware, memberware. You have to ask yourself, are you going to cough in the middle of that? Yes, I am.

Al Elliott: Join us on next Tuesday.

Leanne Elliott: Join us on next Tuesday. Conversation. We’ll be spinking, spinking conversation.

We’ll be spinking.

Al Elliott: Have you had a lunchtime drink or something?

Leanne Elliott: Yes. Join us on the Thursday where we will be joined. You just got through it.