David Henzel shared the importance of developing organisational culture along with the details of his successful product launches.
Hammad
Hey David, thank you for being on the show. So, there's a lot you've done. So I'd love to talk about who you are and how you got here.
David
All right. Thanks for having me on the podcast. My name's David Henzel, I've always been an entrepreneur. I failed miserably in school because someone didn't fit into the system. I have been to 14 different schools.
And I was pretty lost. Didn't know what to do, what I should do with my life. And then a friend of mine asked me like, Hey man, you're good with computers. How about we start a business together and just kind of coming into my entrepreneurial journey. And this was like, really the thing for me, where I could just do whatever I want to do.
And it's not that I didn't like to learn this or not like this. I just want to learn and focus on stuff that I want to focus on what is great for me. I'm originally from Germany. I had a variety of businesses there. The last one was an e-commerce business, which I sold in 2007 and which gave me the money to get my investor visa to move to the United States.
I always wanted to move to the States because back then Germany, there was no startup scene and I was very attracted to what's going on in the States. And I had really good friends in LA and I always wanted to move there. So my investor's visa came over and I looked around what I could do there.
Friends of mine just sold their hosting company. And we're in the process of starting CDN. I haven't done anything with a service in a long time, but having the knowledge and having the capital to invest and I took over product development and marketing, which worked out really great.
We sold the business, like four years ago. had a really nice exit.This was MaxCDN.
Hammad
Okay. Do you want to talk about that a little bit? Just five minutes quickly.
David
Sure. So yeah, originally we started as nutty nicest about product launching. We launched as an enterprise CDN and we thought, okay, let's just make it a little cheaper than the other CDNs that are out there which didn't didn't work. So if you read Crossing The Chasm and the Press Bias, always buy what's their peers buy, they don't take any gambles because you know when a founder makes a decision on a business, he makes a decision in the best interest of the business, but somebody in the larger organization, they will make a decision based on what's good for them.
And, you know, maybe you've heard, you never get fired for choosing IBM. So, you know, People in these positions often just pick what's the safest bet for them. So we had a really hard time getting started, especially being like a no-name non-funded, just that kind of stuff on a CDN. And then we pivoted and launched MaxCDN, we looked at the market and back then CDN was like an enterprise thing.
And you had to pay $500 a month to get an account and have like an annual contract or so with Akamai. Below that they didn't even want to talk to you. We thought, Hey, there's so many stops out there for them. That's not reasonable. So we said, let's build MaxCDN and our mission was to make CDN as accessible and easy to use as possible for everybody.
And this really really took off. And in terms of launching, since we aren't just talking about launch strategies, The key thing that we used there was we reached out to a lot of bloggers and said like, Hey man, we're this CDN thing here and we can make a site faster. Google just announced that having a fastest site will make you rank higher in Google. So we made a lot of bloggers aware. We gave them a free account, asked them to use us, and then rather give a review about us and they can trash us or talk positively, whatever the experience is, just give us some exposure, which worked really great.
We're like a top three in the Google rankings for the keyword CDN within four months or so. So this worked out really great. And another key thing we did was we picked the poster child and we reached out to Mashable and said like, Hey guys, you know, you're spending a good amount of money on CDN right now. How about you use us? You get for free. We even buy a banner on your site, pay a few grand to have a banner up there in return. All we wanted, you put at the bottom of your page saying accelerated by MaxCDN. So, I think that's like a key thing for launching. You could figure out some big name, reputable company that kind of gives people a trust in you like that this new commer here can actually deliver and rock something. So that's definitely one tip to give you to kind of get some reputable names on the books.
Also we did outreach to other blocks saying like, okay, Mashable does this, does this. These guys are using MaxCDN, give it a shot. And then something worked pretty great.
Hammad:
Right. So let's come fast forward to today. I know you've launched multiple companies and you actually run them simultaneously. So I would love to know how you actually start a company. How do you get into a point where it's running properly and then you actually hand it over to someone else, and then you just manage it from a distance.
David:
So we just launched UpCoach which is a platform for coaches that helps them to deliver their coaching better.
If you're one-on-one coaching or group coaching or training and also run your business, just like to optimize a whole coaching business and then get this into proper form. And the launch process is. There's a story from this, American general after the Vietnam war, that was the first time that the president visited Vietnam after the war and the general came with them.
And then the opposing general Smith and the American general asked, the other guy like, Hey man, like, how the hell did you beat us? You know, we had like way more money than you, more troops, better weapons but how in the world did you beat us. And he said, we know the job better, you know? So I have like all my daily habits, I have a task that's called understand the jungle.
So I have calls with coaches multiple times a day to really understand what are they doing and what are their pain points? Because I'm not a coach myself. I mean, I've been coaching people in my business, but I'm not a trained coach. It's not my business, not my livelihood. So I scheduled a lot of calls with the people who are in the business to really understand what their pain points are and what they're currently using, which technology they use and you know, where it's lacking and what could be improved.
Hammad:
So you've just launched up coach. I know you've got a bunch of onboarding calls planned after this. When did you first start to work on this product?
David:
Almost a year ago, like 10 months ago then.
Hammad:
So well, you said that you speak to coaches a lot. How did you actually get them to speak to you?
That's the first question. And the second is, did you have a bunch of interviews with the coaches first, before you started product development? What was the process like?
David:
So the process behind was that initially, as I mentioned, I have a few other businesses. One of these businesses is I used to have a course that helps people to apply business principles to family, life, something my wife and I figured out, and I modified this to a course too, for executives to be on their A game, which is called managing happiness, managing happiness dot com, where I helped them to figure out their personal mission, their core values, their 90 day, one year and 10 year goals and the habits that they need to achieve these goals.
This was like something that I developed and then initially I trained the people who were running my other organizations because I wanted them to be on their A game. If they're on the A game, then the businesses would benefit from this as well. And for this, initially it was an online video course, but the completion rate was very low.
So I switched to group coaching. So actually the first time I did some extra coaching and the results were tremendous from 7% completion rates to 94% completion rate and therefore, first we used Google sheets and WhatsApp and like a bunch of tools. And it was like a lot of overhead work for me.
So I asked the CTO of one of our businesses. Could you build me a habit tracker? This was like the intro thing. And then kind of got more and more and more and more and more, to the point where we had like a really cool system to run these group coachings, just like for myself. You know, it's another thing If you launch a product, if you scratch your own itch, then you'll build away by the progress. You really understand the pain points and I never thought about really spinning this out into another product.
His name is Todd Herman. He wrote the book, The Alter Ego Effect. He's been doing this for now over 20 years. He's a real rock star. And also well-known in the field now and I asked Could you look at the thing that I built? You know, another coach just wants to know, like, what do you think about this?
And he looked at it and said, like, that's amazing. I want to invest. I want to be part of this. Let's make this big. And so yeah, this is how we got to this point, but even though we have Todd's expertise and he gives us 20 years of coaching experience, he gives us tremendous input.
But I also want to understand myself because I want to know the jungle as well. So this is why I had to have all these coaching calls and in terms of talking to coaches on just LinkedIn as your friend, just reach out to people and chat with them or in Facebook groups, et cetera.
Hammad:
So within a year, how many coaches did you talk to?
I know it's a rough number. You can't really pinpoint it.
David:
A hundred plus a hundred plus. And most in the last six months. I actually go to my habit tracker and can count, but yeah.
Hammad:
So going back to how you build a business and its handover, so you get to know the jungle properly, that's the first thing then what.
David:
I mean then also building the internal processes to make sure you have SOP standard operating procedures for everything and also kind of going one step back. I think it's really important to understand what you're doing here and who you're doing it for.
You know to kind of define the purpose of your business slash mission and vision, and kind of where you want to go and also creating a proper organizational culture, but it's not really at the launch phase, but like once you kind of get going, it's really important that you build a proper organizational culture and that you have emergence, it's spelled like emergency, but it's basically the idea that you create this self-governing system. So when you look at an ant colony, they have like workers, warriors and harvesters, and it's like 33% is basically divided in equal numbers.
And when they meet each other on their trails, where they walk. They have a center that if the ratio is off and there's like too many workers are coming in nuts and not the harvest anymore they switch and become a harvester. And also basically it becomes a self-governing system.
If you have like the proper company mission, vision and cultural values in place, then this happens. People can make decisions without the leadership team, which is really important once you scale because people can't come to you for small decisions but if you're really having to listen to their heads and show them examples of how you live your company mission, vision, cultural values, and explain decisions that you make based on these then it can turn into something like this, but I guess the topic is launching and not.
Hammad:
No, you can talk about this. Can you give me an example of how you actually built a culture and probably this company or any other company?
David:
Yeah, so in the interview process, we already confront people with our company mission, vision and cultural values. It's important for us that people buy into the cultural values. For example, at MaxCDN, one of our cultural values is building cool shit, you know, we did this on purpose. This was actually our first cultural value because we want to attract engineering talent. We need people who are excited about building cool shit.
And the second one is that somebody who gets offended by a company using the word shit in their cultural values, you know, it's like somebody wants to come to work in a tie. He wouldn't have fit into a culture anyway, you know, so we got to kind of use this as a filter as well. So, yeah that's one example of culture.
Then when people sign a contract, they have to kind of write F next to each core value and then sign like, okay. I live up to these, otherwise, this can be reasons for termination. Then once we get people on, we have a monthly call where we walk through our company mission, vision, cultural values and explain each cultural value with some decisions or people who have been demonstrating these cultural values on real life examples.
So people can know and judge by this.
Hammad:
And do they do that with the managers or with the higher ups with the CEO?
David:
Initially I was always doing those. And then once we were more established and I handed off to the GM and another in terms of culture and creating urgency, I think that these are the key things people would really make understand.
Another cool example. A friend of mine, he started ring.com the doorbell company, and I've been chatting with him and his lead engineer set up engineering. And he said, one of his engineers came to him and said, okay, Hey, we have these floodlights that you put on the side of the house.
And when somebody walks past this floodlight, that goes on. And a person to be like, Hey, what are you doing on my property? Leave or I call the police. Instead of like this, since we have these flashlights and the microphone we could program a party mode. So people can turn on the party mode when they play music.
And these things will flash with the music, the engineer thought, it's the best thing since sliced bread. Right? And you can tell us engineers, like, dude, that's a fucking stupid idea. Go back to your desk and keep on working. And then this person would be crushed, would never show initiative, et cetera.
Hammad:
So then what happens after that?
David:
Oh, you build a culture. I mean, this is part of the process, I think like kind of going back to the launch. It's kind of flux, some more technical things to really get started. If you are not embarrassed about your product, when you launch it, you've waited way too long. Just get it out there, getting real user feedback, kind of really understanding what people like and what people don't like.
And be really in touch with them. You can't just build something and you have to really know what's happening there. So what I'm doing right now is I'm doing with every customer who signs up, recording a personalized video, I look at their website kind of what they're doing and say like, Hey Thanks for signing on I'm the product founder. I want to really give you the best possible onboarding experience and learn about your business. So you get the most out of the software as you do this and this, you could do a block and give them some information, like, please schedule the call with me so we can jump on the onboarding call because you have to really do the groundwork and really understand your customers so you can build something that's have product led growth. So activation, I guess, is like the key thing. Once you've launched, how do you activate as many people as possible that they actually use your software is the most important.
Hammad:
Okay, got it. So you do that, you've launched a product, you've onboarded the customers.
At what point do you think now it's time to really set that process in place and then just get out and then hand it over to someone who can run it day to day. Probably better than you.
David:
At MaxCDN, the leadership team was way more involved in everything.
And when we sold to StackPath and StackPath was founded by a gentleman who also started software, who he sold it to IBM for $2.4 billion, some like this like really big number and it was very interesting to see how he built the business, how he really laid the foundation for everything.
And I was the CMO initially. I didn't want to stay, but they had a need for somebody who can own the CMO part. So I was like, Hey, I'll throw my head for a year and a half. And when I was building the brand, I always pulled them into meetings and, okay, this is what we're doing, this kind of where you're going, what do you think?
And he just sat through a presentation afterwards, like it's great and left. After the third time I was like, dude, like I pull them to the side and asked him if I'm like fucking up or like, you don’t care? Or like, what's going on? say something it's like, no, I only have three things to do as a CEO as like, I have to make sure there's enough money.
Either through a raising or making sure it's coming in. Second thing is I have to preach mission to the company, to the inside and to the outside world, like a parrot. And the third thing is I have to hire people who are more competent than me in certain areas as the division leads or as the Department leads and leave them alone.
Just manage them by KPIs. And also just a kind of a really aha moment for me is to find people that are really good and passionate about a certain area. And ideally they have done this part before and just let them roll.
Hammad:
Great. So can you give me an example of a business you've got, where you just work very less over the week and you've just handed that over.
What kind of KPIs do you track and how do you work with the team there?
David:
So, it's one business that owns two different businesses. One is task drive.com, which is a lead research business and then LTVplus, which is an outsourcing business for e-commerce companies. And for these businesses KPIs that we have is we report on a weekly basis and we report how much revenue coming in, revenue going out, how many people are currently idle, cause that's an important metric, because if you have too many people idle now, then we'll just burn cash, customer complaints.
We have an airlock where we enter every problem that ever comes up. And we review this on the level 10 meeting, which is like a 90 minute meeting once a week, with the leadership team. And you should think of it as imagine you're on an Island for three months and you can't interact with the business.
You just want to see if it's working well, if it's vital, then what are the, let's say seven KPIs you want to see, it's like, Revenue costs, how many new meetings the sales team is having to see that things are going smooth and it can vary based on the business
Hammad:
But do you ever have to go back into the business to fix stuff?
David:
Of course, you know, it's like you build a machine and you kind of take a step back and you watch the machine run and reflect on some areas not working well then you jump in to see what you can do there.
Hammad:
Well, how do you do that with a software business? For example, with UpCoach it's a tech business, right? It's very dynamic where you need to be there all the time. So you can't be a business which is heavily presence driven or KPI driven. You have to go in there, drive the company vision, make sure that innovation is happening.
How do you delegate that to someone?
David:
I mean just hire people smarter than you. Find somebody who's really good at the product. Find a good CTO, find some good customer success person, you know?If you do it all yourself, then you can’t scale.
And you are always going to stay small. Once you have some traction, it was like what Lance said there, the CEO of Stackpath that you have to find good people and work with them and let them do their thing because ideally they're much better than you at this area.
And then you can just focus on the vision of the company and still stay in touch with the customers. Kind of really know like where the puck is going. And also there's this book called Rocket Fuel and eosworldwide.com by Gino Wickman. It's the relationship between the integrator and the visionary and it's also different personalities that fit to the visionary versus fitting to the integrator. It's also an interesting thing to understand that if you want to hand something off to someone.
Hammad:
Great. So what's the plan with that UpCoach? What's the timeline looking like?
David:
So with Upcoach, it's very close to my personal mission. I see myself as a change agent, who's transforming the lives of individuals organizations so they can reach their full potential. It is just a thing that makes me the happiest.
And, so first I did this with managing happiness, but now with UpCoach, I think I can have even a bigger impact because it's with this thousands or thousands of coaches can have an impact on the lives of millions of people. So by building this framework, I can allow coaches to amplify what they're doing and just have more impact.
This is the thing that gets me very excited. So I think I'll stick with Upcoach you know? It's my passion business.
Hammad:
Great. So one last question, David. So someone who's starting out and you told me last time that you've been in the business for 20 years.
I'm sure. You've learned a lot. You've made a bunch of mistakes. So someone starting out, what advice would you give them? Okay. I want to be like David, where I've got multiple businesses and I'm able to delegate and just really manage from a distance.
David:
I learned a lot of things. Like most influential for me was probably money as a side effect of providing value.
You know, if you figure out how to provide as much value as possible to as many people as possible and you will be the richest person around. And then in the same breath, like money doesn't fucking matter. It's more about having impact and changing people's lives for the better. This is what makes you feel really good than just like having money in the bank that doesn't really matter. My business partner says like, okay, once we get the payments and it's going to feel so great. And you know, then when the money came in, that's me Hey man. How do you feel now? What changed? Like nothing changed. You know, it's kinda like money really is.
It should never be a goal. And you should kind of really enjoy the process of, of what you're doing. And another really key thing that I learned, I used to be very introverted. I would never be on a podcast and it would be the worst for me to speak in front of people.
It would've been horrible. I'm a recovering introvert. When I moved to the States, I did not like being on conference calls or they were horrible for me, it was really unpleasant. And I realized how much this was holding me back in my business and life. And I thought, okay, I'm gonna change this. So I went to Toastmasters, which is like a public speaking thing where you know how to do public speaking.
I went there twice a week and I went to two networking events in Los Angeles per week and just like exposure therapy until either I didn't care anymore about talking to people, et cetera. But when my yoga teacher said every decision in life, you make out of fear because it's something I really knew deep down inside. I just couldn't articulate it. And let me give you a few examples about this. For example, in sales, let's say, I want to sell you. I want to sell you UpCoach. Right? I used to hate sales with a passionate feeling like a used car salesman. It's shoving something down people's throats.
But if I know that, UpCoach is something that really can help you to run your business better, to make more money, to make your clients happy, et cetera. Then you can push yourself and say like, Hey man, I know it's gonna be really good for you. Like. Did you use it please? And you feel where I'm coming from, that I have your best intentions at heart, you know?
And that makes me out of love because I want to improve your life. Versus if you just sell because you have to achieve your numbers, you're running out of money. You have to pay a mortgage. If this is your motivation for selling, then people will feel this nipple by less likely. And also it's just going to feel horrible for you. My MaxCDN grew very fast.
And at some point we had very bad internal communication. So I asked my assistant, Hey, please go to everybody in the organization to the department heads and figure out what they're doing this week and what they've just accomplished. So we can kind of stay on the same page and combine it in a newsletter.
And we sent this out at 4:00 PM on Mondays. And every time she gave me the draft, I had to correct a million things. Like, I asked her in my office,Hey, you're doing this out of fear, not for love. And she looked at me like, what the heck do you want for me?If you do out of love, you will really do your best to really understand what everybody has to say.
It's like an instant switch. I could give you a lot more examples but this is also my personal mantra. Make decisions out of love not fear and meeting somebody on the plane, you know, I'd never talked to them. I've always felt awkward, but now it's just like talk to them. Hey, there's another person that sees how I can provide value to them and sort of wrap it up with this topic, public speaking, if I stand up there and I think about I'm full of fear, like, Oh, do they think how I look, do they think what I'm saying is stupid or I have a German accent. And I can't give a presentation on freeze, but with things like, okay we will see here how I can potentially help people like being on a podcast and then I'm pumped. I can present and I can just flow because I am doing it out of love.
Hammad:
Thank you for being on the show and I hope I can speak to you soon. Thank you.
David:
Thanks.
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