Steven Toy

Warning! The Below Founder's Advice on Growth is Grossly Oversimplified for Illustrative Purposes. Sustainable Growth vs. Acquired Growth Many companies try to grow as fast as possible.  There are lots situations where that makes sense - winner take-all land grabs, for example.  A temporary advantage you want to exploit.  Often, companies that try to grow as fast as possible try to acquire growth. Lets say, for example, you want to grow as fast as possible.  The obvious thing to do is to spend money to acquire new customers, say from Google.  Suppose you have 100 customers.  Suppose further you’re able to get 100 leads a month from Google, and you close 10% of leads into customers.  Say further you’re a subscription business, and you have 100% retention.  In the first month, you go from 100 to 110 customers.  That’s 10% month growth, not bad!  The second month, you get the same flow from Google and you go from 110 to 120 customers. That’s 9% growth.  The third month, you go from 120 to 130, which is 8.3% growth.  Google steadily sends you a linear about amount of leads which you close into customers, so your customer count grows linearly each month, and you have a diminishing growth rate.  Knowing this, what founders do is attempt to develop more channels, and layer them on.  So they buy Social, they begin to hire sales reps, they conduct other activities.  But each of those channels likely has the same dynamics as the example with Google Paid Search.  They tap out and yield diminishing returns.  So in order to maintain a growth rate, you need to find new channels. There is another way: Sustainable growth.  The objective here is to grow equally when you're big, as when you're small. The best way to do this is to grow from your existing customer base.  Say you have 100 customers, and each one of them refers a lead each month, and you close 10% of them.  At the end of the first month, you’ve gone from 100 to 110 customers.  That’s 10% growth.  Then, next month, you get 110 leads, and close 10% of them for 11 new customers.  Now you’re at 121 new customers.  Unlike the Google example above where you saw diminish growing rates from a linear channel, when your inbound leads are proportionate to your customer count, sustainable growth gives you 10% growth again.  Founders are under immense pressure - particularly from investors - to deliver growth as fast as possible. When this turns out well (rarely), the riches are vast (asymmetrical advantage to investors). So they turn to acquired growth. The problem is that once you start down the treadmill of acquired growth, you have to keep running faster (layering on new channels) to maintain the same speed. Sustainable Growth is when your leads grow because of your customers, not because of external factors beyond your control. It is not always the right answer, but founders should wisely deliberate the right road because the acquired growth treadmill is a path of no return.

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DOES ANYONE WANT A TICKET FOR A BORING EVENT? TicketCo delivers a rock solid platform based on a range of the best global technologies out there. We have 24/7 support, world class Service Level Agreements (SLA) with our customers and professional processes and services across the whole value chain. Our far biggest investment is our product, backed up with the professional services needed for a rock solid ticketing platform. 🎟️ Millions of tickets through our platform every year, and there is nothing funny about that. But here is what is funny… 🤩 Every ticket sold through our platform is for something fun. Who buys tickets for a boring experience? No one! That is why ticketing and the heroes in this industry needs to be more in the spotlight. Remember - They are the ones who open up the first part of the customer experience to all the fun stuff you are doing. They are a key part of the machinery that makes it all happen. People like Manal S., Georgia Bekyra, Thomas Rypens and so many others that we have had the pleasure of meeting through our podcast. So here is a shout out to all the wonderful people in ticketing who are working non stop so that you - yes you, can have wonderful experiences, share emotions with your best friends and have memories and stories to tell forever. Sports clubs have mascots and now, so does our ticketing podcast Dont forget your tickets who are boosting the category of ticketing people 🐶 Meet Booster, on this picture - Created for one purpose - To boost positive energy, boost ticket sales, boost fun and to show you that ticketing is more than just a ticket. It is something that represents the above and so much more. 🪨 We will continue to deliver a rock solid ticketing platform with all the serious features a ticketing team needs available 24/7, minute after minute one ticket at a time. But we will not forget that it is important to have fun. Neither should you and most important of all - Do not forget your tickets. 🎙️ Stay tuned for more fun from Dont Forget Your Tickets, a podcast powered by TicketCo. We are now taking it to the next level. 😍 #ticketing #serious #enterprise #fun

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Episode 349 of The VentureFizz Podcast features Chris Gardner, Partner at Underscore VC: https://lnkd.in/ex97EfQd. One time, could be luck. Two times, ok… maybe you are on to something… but in the case of Chris, he has been part of several acquisitions as an operator, so it just makes sense that he is currently a VC, as he has a knack for picking winners. This episode is another fun walk down the Boston tech memory lane, as we discuss some legendary companies that were acquired like edocs (an early e-billing and customer self-service applications), M-Qube (early mobile messaging and content services company), ExtendMedia (white label video platform), and Paydiant (an early mobile wallet tech company that powered payment apps for Subway, Harris Teeter supermarkets, Capital One, MCX, and many more). In this episode of our podcast, we cover: * Chris’ background story and how he got into the tech industry. * The stories and his role in the companies previously mentioned including being a co-founder of Paydiant, their impact on mobile wallets, and the company’s acquisition by PayPal and what he learned there. * How Chris became a VC and the details on what he is targeting in terms of investments at Underscore. * Pitch advice for startups and the importance of storytelling. * How you need to think about compensation structure as a company scales. * And so much more. Episode Sponsor: As a longtime champion of the local startup ecosystem, Silicon Valley Bank supports innovative companies with the solutions and financing they need through every stage of growth. With more than 1,500 bankers and relationship advisors, and $42B in loans as of Q2 2024 – SVB delivers the right people, service and resources to support your entire financial journey. Learn more at SVB.com. Thank you to the SVB team for sponsoring The VentureFizz Podcast: Christopher Morrison, Alicia Fuller, Nicole Hawkey, Ben Maitland-Lewis, Hani Azzam, Hannah Heyliger, Lisa Puleo, Mark Gallagher, Nancy Langenstein Lots of great people were mentioned in this episode like Larry Bohn, Kevin Laracey, Jim Moran, Mike Massaro, Rob Orgel, Bob Davoli, Lars Albright, Mike Troiano, David Chang, Jennifer Lum, Andy Miller, Eswar Priyadarshan, Keith Kocho, Michael Skok, Lily Lyman, Richard Dulude, James Orsillo, CFA, Brian Devaney #venturecapital #startups #fintech #entrepreneurship

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Pump fakes vs. *actual* signal - both can be indistinguishable to a founder but produce drastically different results. Let me explain.... In venture, a 'pump fake' results in a founder building a bespoke solution for a customer under the false pretense that the solution/product has broad applicability for many customers. Customer product requests are intoxicating, especially in PMF phase, because it makes teams feel that 'we're onto something' and there's a market for our product. Pump fakes can be company-killing b/c it sends a team with limited resources down a path that ultimately becomes dead-end with little runway to pivot. Here's how you can avoid the perennial pump fake and keep pushing forward: (1) Don't just hear the customer, *listen.* Hearing is a passive and involuntary activity resulting in zero info retainment. Listening is active and voluntary process that forces you to absorb and react to information. By listening, you're able to translate customer feedback into measured actions. (2) Speak to *many* prospective customers BEFORE you start building. This helps you internalize the true hair-on-fire problem customers are facing and filters out atypical feedback not shared by a customer cohort. (3) Understand customer nuances and recognize that not all customers are created equally. When evaluating prospects, try to understand the composition of their business (team, fundraising, revenue, ICP, etc..) to triangulate why your service is needed for a particular customer. Often times, pump fakes are missed simply due to lack of customer context! https://lnkd.in/euYZ-TKk

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49 founders and senior startup leaders respond to a survey from Sifted on the relationship between founders and VCs. Are expectations off from the start as VCs try too hard to pander to their founders with over promises of "value-add" and extensive platform teams? Do founders need to be reminded of their primary role - execution?

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A founder's perspective on Founder Mode: It's about craftsmanship and soul Last week Brian Chesky and Paul Graham ignited the tech startup world with a discussion around "founder mode", which Paul summarizes in this post - https://lnkd.in/gC7swj59 This comparison of founder mode vs. manager mode and stream of bad advice around it really resonates with me as a multi-time founder. I find there are two areas in particular that get systematically eliminated in the process of moving from product-market fit to "building the machine" and scaling up an organization. 🔮 🛠 Craftsmanship: Early days require a lot of craftsmanship - as if you're designing and building custom homes for a small set of early customers. You need to inspire them with your vision, co-create with them, and make constant decisions about how to iterate, where to influence, and how to listen - all shaped with a view to repeatable and scalable patterns you can leverage to scale. This requires a lot of top-down intuition and hands-on crafting to get right - it also benefits from strong and fast decision making from the founder(s). As companies grow, this founder craftsmanship is easy to see as an enemy of scale that needs to be removed in favour of proven process. While it is true that this is not easy to scale, it is possible and worth it to figure out. I saw Zuck do this at Facebook as we scaled, shaping high impact initiatives and role modelling his craftsmanship to high potential people in his "Zuck reviews" for important new products and key initiatives. Combine this with a clear set of values and entrepreneurial people and you can keep the founder's touch on key initiatives without giving in to manager mode. 💙 🙏 Soul: A founder-led business can be felt much easier than it can be described. There is a passion, a set of values, a purpose that gives the company indescribable depth when done right - that feels magical and gives the company soul. This is the part of founder mode that enables people in the company to embody the same values, act with the same standards, and channel the inner purpose and passion of the founder. It attracts people that are entrepreneurial and secure in their abilities. People who see a founder's touch as a secret ingredient to add, not a box to be checked or worse to be avoided. My former Meta (at that time Facebook) colleague Fidji Simo wrote a great perspective on founder mode for non-founders in the information today, which I also see as possible. Founder mentality is a mindset and combined with an ability to imprint a sense of craft and soul into a company. I think founder-led companies like Meta and Shopify have shown a pattern to study and replicate in scaling startups, they have also produced a talent pool to mine for leaders that can operate in founder mode as the company scales. What do you think? Curious to hear your thoughts on founder mode... it's been a fun one to think about over the weekend. 🤔 #foundermode #founders #yc

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I have spoken with more early-stage Founders in the first half of this year than any other full year previously. A lot of the time, a big focus for them is around fundraising and it's always high on the discussion agenda (both pre and post raising). Questions like the below are front of centre of them conversations: ▶ What advice can you give me when I'm sitting down with an investor? ▶ What do you think of my pitch deck? ▶ Is there anyone you can introduce me to who's interested in what I'm building? ▶ Once we've raised, how do we start building but keeping the runway extended as long as possible? I received a great email from Hustle Fund earlier in the month with the clear message to Founders to know your numbers and know them in detail. I hope they don't mind me sharing but below are 5 areas they shared that a Founder(s) must know and be able to talk about. There are definitely more you need to be prepared to discuss but these are ones you should absolutely know. 𝟭. 𝗥𝗲𝘃𝗲𝗻𝘂𝗲 𝗡𝘂𝗺𝗯𝗲𝗿𝘀 🔹 How much revenue did you earn this month? Last month? The month before? 🔹 Which acquisition channels drove revenue? 🔹 What is the cost of your product (or subscription)? 🔹 How much of your revenue is attributed to the product vs. your consulting services? 🔹 Excluding marketing, what are your margins? 𝟮. 𝗔𝗰𝗾𝘂𝗶𝘀𝗶𝘁𝗶𝗼𝗻 𝗡𝘂𝗺𝗯𝗲𝗿𝘀 🔹 What is your cost per acquisition? 🔹 What is your website conversion rate? 🔹 How many daily active users do you have? How many monthly? 🔹 What is your retention rate?  🔹 What is your monthly churn? 𝟯. 𝗙𝘂𝗻𝗱𝗿𝗮𝗶𝘀𝗶𝗻𝗴 𝗡𝘂𝗺𝗯𝗲𝗿𝘀 🔹 How much have you raised to date?  🔹 How much are you raising now? 🔹 What were the terms in your last round? 🔹 What are the terms in this round?   𝟰. 𝗠𝗶𝗹𝗲𝘀𝘁𝗼𝗻𝗲 𝗡𝘂𝗺𝗯𝗲𝗿𝘀 🔹 What milestones do you expect to hit with this raise? 🔹 What metrics do you care about when measuring the health of your business? Why?   𝟱. 𝗦𝗹𝗶𝗰𝗶𝗻𝗴 𝗮𝗻𝗱 𝗗𝗶𝗰𝗶𝗻𝗴 🔹 How have your conversion rates changed over time? Have they increased, decreased, or stayed the same? 🔹 How have different customer acquisition channels performed? For example, what is the difference in conversion rate between Facebook ads versus LinkedIn ads? I hope the above helps guide the Founders out there who are engaging in conversations with VC's / Investors. I'm happy to talk through with anyone in my network who would appreciate a sounding board going into investor meetings, would like to discuss support in getting ready to raise or you have raised and need support around next steps. #founders #startups #investors #vcs

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If we close 100 more deals that are just like this one, will we be happy or sad? That’s a question Raw Signal Group co-founder Melissa Nightingale regularly asks herself before inking a contract with a new customer. It’s a great (and tough) reminder that in the early days of startup building when you’re finding your first handful of customers, not all growth is good growth — and the interest between you and potential customers should be mutual. Tons more great questions like this one that founders can ask themselves to pause and take stock of their business and decision making in the latest article out on The Review (link in the comments).

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I've done the £0-£1m journey in SaaS five times, three as founder. Here are 10 (of the many) key learnings I wish I knew first time around.... - Understand your leap of faith revenue assumptions that make your plan happen. Create 'x' meetings (how), 'y' % become opportunities, 'z' % converts, ACV is 'a' and payment split (annual/monthly?) is b/c. When its broken you can see where and remedy or replan. - Don't scale quota carrying reps without the confidence in pipeline. Modelling from opps to work out team size and revenue rather than multiplying reps by a quota is much more accurate. Also, no one ever models reps that don't work out or leave. But they do (both). - You don't need to wait to renewal to renew. Renew at the times of change and opportunity. Rip up old contract with 6 months left and create an 18 month new one. You can credit any cash already paid. - You can subsidise product development, if a prospect needs you to re-prioritise the roadmap. Just be transparent and understand the cost of de-prioritising other features. Never build something not planned in next 12 months roadmap though. - Annual paid up front makes SO much difference to cashflow, ability to fund growth and dilution. Model it and see. Buy Now Pay Later tools for SaaS teams now make this a no-brainer. - Make friends early with your potential future acquirers. Including competitors. If they know you are there, maybe your name gets mentioned around the boardroom table at the right time. - Never ever compromise on values when you hire. Hire good people with drive, potential and commitment over resume experiences. - Customer Success doesn't need to be a cost centre. Over invest in CS but plan to make it a revenue driver rather than cost. Investing in time with customers to understand their problems you can help with is a win win. - Pricing is the biggest lever you have on growth. Period. That doesn't 'just' mean putting up prices. Increasing ACV through product offering, swimming up stream etc. Test pricing. Understand value and how you can align value and pricing. Identify where money is left on the table and where pricing model is the cause. - Get mentors. And coaches ;-) So much more I could add - what would you add? Still learning EVERY DAY.

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Every (pre) seed stage tech founder talks to VCs about 'traction'. Here's the hierarchy of traction: Revenue / Annualised Recurring Revenue (ARR) --> Contracted ARR --> Paid Proof of Concepts --> Unpaid Proof of Concepts --> Trials --> Master Service Agreements --> Letters of Intent --> Pipeline value If you are pitching to VCs, focus their time and attention as far up the hierarchy as you possibly, credibly can. And don't even bother telling us about your awards. It doesn't move the needle at all. #founders #startups #vcfunding

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What is “Quality of Revenue”? It’s apparently what VCs are demanding? To me it means 3 super simple things that are ridiculously hard to nail. 1. What’s coming down the sales pipeline - speed? quality? ease? etc. 2. What are clients doing? On ICP? Solid P&P at margin? Happy? 3. What, more or less, are they doing post sale. NRR + or - When I hear a solid story backed up with data for all 3 camps, that makes me fizz. Sure this is a bit SaaSy but the principles are gloriously simple and same same for all businesses, of any flavour. Obviously all interconnected and living on quicksand. If you can, build this powerful 3 pronged narrative against a strong vision looking firmly at a ‘future’ market. Quality.

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Aligned founding teams are the cornerstone of any successful venture. Did you know that most co-founder disputes arise within 6 to 9 months of working together? Here is a clear plan how to avoid these... The critical period often marks the shift from the initial excitement of building something new to the reality of making tough decisions, dividing responsibilities, and navigating pressure as it increases. Research shows that disagreements around vision, equity splits, roles, and decision-making authority are some of the most common friction points. These conflicts can lead to inefficiencies, stagnation, and in the worst case, to the breakup of a promising startup - unfortunately a common event in early-stage startup investments. But it doesn't have to be this way. Here are some strategies that successful co-founding teams adopt: 💡 Set clear expectations from Day 1: Align on vision, values, and long-term goals early on. 💡 Define roles & responsibilities: Ambiguity breeds conflict. Ensure every co-founder knows their clear role but also leave room for collaboration. 💡 Foster open communication: Regular, honest check-ins and quick feedback can eliminate tension before it escalates. Don't wait for the pressure to boil over—proactively address challenges. Building a company is hard. The strength of your founding team can make or break your journey. Choose wisely and take the time to check if it fits from the very start. If you are currently just starting out, use the 50 Founder Questions Guide - you will find the link in the comments below. 👇🏼 #startups #entrepreneurship #vc #venturecapital #investments

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Who wants free access to a list of 2,000+ VC contacts investing more than $20bn into SaaS startups (early stage + growth) in 2024? We've spent more than 1 month to compile this data and make it easily searchable in our database. If you are a SaaS founder looking to raise VC money within the next 6 months, then this VC list will help you save tons of time. Get free lifetime access to the VC list here https://lnkd.in/eDTgBb7p If you know of any SaaS founders who could benefit from this list, just mention them in the comments section. If you know some really awesome VCs investing into the most promising SaaS startups, then please mention them in the comments and we will include them into the VC list. #venturecapital #startups #startupfundraising #saas #vc

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"Platform" in VCs often feels undefined, and different at every firm. But one thing is clear: firms with dedicated platform teams are seeing higher investment returns. What is 'Platform' in VC? Think of it as a support engine for portfolio companies. Platform teams accelerate growth by providing: 1) Strategy & Growth 2) Talent Partner 3) Marketing & Brand Partner 4) Business Development & Partnerships Lead 5) Community Manager 6) Operations & Scaling Partner 7) Fundraising & Capital Advisor Platform in Venture Studios vs. VC Funds: The big difference? Timeframe. Venture Studio Platform: Involved from concept to exit, guiding startups from the very first spark of an idea. VC Platform: Steps in after the startup is funded, focusing on scaling and growth but not the initial concept phase. Both play critical roles—but understanding these distinctions helps founders and investors make the most of their platform relationships.

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🗞️ I caught up with Hayden Evans recently at Beam it Recruitment to talk about: ▶ how I started with programming and my career so far ▶ the current landscape of Elixir learning materials ▶ the pros and cons of a language like Elixir ▶ why I started PureType and how it fits into a new world of software development 🔗 Link to the article is in the post below

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Trigger warning. UK founders to VCs: "you (generally) suck". I was taken aback by the intensity of comments made during an exit fireside chat organised by our friends at ARGO, Jeff and Aneesh. Room full of founders, we're talking about the importance of starting exit planning very early (say 3 years+ prior to exit) and the message is: "I would never feel comfortable bringing this topic up to my board, I just would not trust them to handle any of it well". Ensued a discussion about Tier II board vs. Tier III boards, how much VC boards suck, how VC's just do not know how to interact with founders and how a number of key topics are best actively avoided. Nods across the room. The Tier I Board, the kind of place where you could actually bring up strategic topics like, you know, "who might actually want to buy us some day and how do we start building the right kind of relationships today" seemed to be a sort of faraway land, as if sitting with the Knights of the Round Table or the Jedi High Council would actually be easier to achieve. Damn. So we can say all we want about founder-friendly blah blah but if this is still the prevalent reality for UK and European founders, what the heck are we doing and when do we start the topic of "being a great board member" seriously? We need to collectively get out shit together and start training investors to be better board members.

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What are your thoughts on Founder Mode? For anyone not in the loop, there was a recent essay on this from Paul graham: https://lnkd.in/e8HE25DB The idea is that, no, you shouldn't pretend to be a manager when running a business. Instead you should be what you are - a founder of that company who can continually tweak levers and gears until the business runs in tip-top shape. I honestly found the term "Founder Mode" to be quite opaque; what does it mean? Why is it actually different from Managing? I really like this write-up I stumbled across on Reddit: https://lnkd.in/eG89hJ2V TL;DR - there's a 5k foot view of the company and a 20k foot view. The 5k foot view is "Founder Mode", AKA "Boots on the ground". You're actively involved in parts of the business where you have pressing issues. The 20k foot view is "Manager Mode". You get regular updates, but as long as the gear continues to turn it isn't something that requires your active attention or participation. As NanoAPI | Techstars '24 moves forward, I'm actively looking for ways to improve our processes as we begin to grow - giving ownership to our early employees over projects seems the way to go. This of course would not be "Founder Mode", so there must be some additional processes in place to step into the projects other employees own. Curious to hear how other startups are doing it. What is your current approach? #startup #foundermode

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One of the most powerful and probably the only podcast series I have seen a lot is Masters of Scale by Reid Hoffman. This episode is one of my favourites. I think it is invaluable advice for any founder. In this episode Paul English, founder of KAYAK talks about how a founder should think about recruitment & talent. #AlwaysBeRecruiting https://lnkd.in/g24xCtDz

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Why everyone is talking about Founder Mode and how to build companies that stand the test of time.  Last week Paul Graham posted on the topic and sparked a fire storm which managed to stir up almost everyone including The ALL IN podcast crew and The Economist. For context, Paul Graham is the founder of Y Combinator (YC) the most prestigious and influential startup accelerators in the world. The All IN Podcast is one of the most popular shows globally and the 4 hosts are experienced founders and investors.  The Economist is widely considered a high-quality publication and a respected source on business and economic matters. The essay is very light on detail so the commentary is all over the place but there was one key message that is worth exploring,  namely should the founder stay ‘hands on’ vs. ‘hiring good people and getting out of the way’ This isn’t a new topic! Ben Howortiz covered this topic almost 14 years ago in a post on Micromanaging.   Ben covers in detail why you can’t just delegate and hope the new hire ‘gets it’ even if they are a senior executive.  ‘Micromanaging new executives is generally a good idea for a limited period of time’.  Unfortunately  he didn’t use the cool name ‘founder mode’ to explain it. I have learned the hard way that you can’t just delegate to new hires.  Great people want to get into the weeds to understand the founder's vision in detail.  If they don’t then ask yourself why.  If their ego sees this as micromanaging then I think you might have a bigger problem.  Obviously it isn’t practical to do this for extended periods of time but if the new hire believes they have all the answers on day 1 then you have to wonder how they figured that out without engaging the founder(s).  Ben’s post highlights how this approach actually builds trust if everyone understand the process:  More here https://lnkd.in/e-JFq4_M We covered similar topics on the Aforja podcast with Jason Foster this week.  Jason is currently the CEO of Oribiotech and was one of the founding team at Indivior who spun out of RB and IPO’d in 2016. This is a master class in hyper scaling to IPO while keeping the culture.  Growing from 5 people to 400 people in 4 years on the way to a $1b in revenue business. We covered how the founders rallied the team around the mission to improve the lives of their patients by treating substance use disorder - how culture is what happens between team building sessions - how to build a global high performance team - why cultural beliefs like ‘care enough to coach’ and ‘peoples actions are well intended’ actually drive results, and much much more.   The episode will be released on Friday on https://lnkd.in/epc_bwUh and https://lnkd.in/eqdJru5h

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