Natalie Nagele - Baremetrics

This week, I chat with Natalie Nagele, co-founder of Wildbit, makers of Beanstalk, Postmark and Deploybot. In this episode we talk about Wildbit’s 15-year history, building a remote team, shunning the traditional “open” office space, juggling multiple products, profit sharing, building a family business and a whole pile of other things!

Josh: How are things at Wildbit?

Natalie: Things are great, really busy but having a lot of fun.

Josh: For you guys what does busy mean with the team?

Natalie: Running 3 products is a lot. I think busy for us right now is we’re starting to look at Q4, so we’re mentally reflecting on Q3. Next week we’ll be doing a lot of fourth quarter planning, thinking through that on every individual team.

Josh: How do you guys do … You mentioned a quarterly planning, do you plan passed a single quarter ahead or limit it at that?

Natalie: I plan annually really high level Wildbit goals. They’re not, “Hire 300 people,” they’re more like, “Where do you want to hit profitability wise? What are some of the company-wide maybe process or team-wide things that I want to accomplish as a team?” Other than that we really try to stick to quarterly because that feels really good for us on how quickly our ideas and theories and the market changes. Does that make sense?

Josh: Sure, sure, it does. I think especially when we talk about product planning it’s really hard to anticipate how people will end up using products, especially when you’ve got newer stuff.

Natalie: Yeah exactly.

Josh: You mentioned the 3 product thing. How do you guys handle that from a team perspective? Do you have teams around each product or do people float between them?

Natalie: For the most part we have dedicated teams. Part of that is due they are using different technologies as well, and part of that is focus and being able to really wake up in the morning and when you’re showering think about one consistent thing. But we have some roles that are on all sides, like QA for us does all 3 products, systems for the most part is all 3 products even though they try to focus project wise per product they do overlap because our infrastructure is shared so they have think through that way. Then Chris and I are on all 3 products.

Josh: Is customer support on all 3 products too?

Natalie: No, they’re separated.

Josh: Okay, cool, because I was wondering.

Natalie: They help each other. It started with Dana. Support when it wasn’t me anymore, Dana was our first support person that we hired full time. That was 5 years ago. She knows all 3 products extremely well. She trained Chris Bowler and that team evolved. Now we do hire for particular teams, or products, right?

Josh: Got you.

Natalie: But they do know the products together and they meet together and that kind of thing.

Josh: When there’s overlap, is that something that’s hard to pick up when you’re trying to do support across a few products or is it just with time, you pretty easily pick up all 3 of them?

Natalie: It varies I think sometimes. When we started splitting up it was because what we were finding was it was hard to keep track of product development on all 3 products. I couldn’t do support right now because I haven’t used every single feature of every single product in a long time. When I was doing support I would know the nuances of every setting, everything like that. I think as our products became more robust the success team was having trouble keeping up, “What did we launch yesterday here? What did we launch today here?”

It’s not a really good experience for the customer because we want to make sure that the team is intimately familiar with the whole product and the use cases. That’s where I think things get complicated. Where they overlap usually it’s to help each other out. If we’re having an outage or if there’s an emergency on the weekend, that kind of stuff, we can get to most of it and we can help our customers out, or at the least do triage and find the right person for the right answer.

Josh: Right, right, right. I recall, it’s been a few years I think but I was Bacon Biz I don’t remember what year, a couple years ago. I remember, I think I recall you saying that you guys with customer support try to not send people to help docs. Do I remember hearing that correctly? You guys try to not offload, you want to give somebody the answer that they need right there on the spot instead of just redirecting them. Is that correct?

Natalie: Yeah. There’s a combination of those 2 things. That was a couple years ago so I think our support docs have gotten better so I think that’s shifted a little bit. My whole thing, and I think the whole success team thing, is we want to get you … First, it’s not as important to get you to a first response time’s low. That’s important, but what’s important to get you to the actual resolution very quickly. If it’s a one sentence answer that could get that person the answer they need versus, “Here’s a link where we talk about that one sentence answer,” then yeah, we’re going to paste it right into the reply or in chat.

But there’s a lot of situations where it’s complicated, it needs screenshots, it maybe talks about different variables, things like that, like a setup or some kind of [inaudible 00:06:20] That we spend a lot of time and effort creating nice help docs or guides that really walk you through a process. It’s not really useful for a customer to get that in an email, like a link explaining what it is and what’s that going to help them with is much better to send them to the original content.

Josh: Sure, for sure. How do you guys, talking about 3 products so how do you prioritize the resources? If you have teams around each product obviously those teams are prioritized but I imagine sometimes one product might need a lot more focus than another. How do you guys prioritize that stuff?

Natalie: I think what we’ve been lucky with is our products are in different life cycles, or life stages I guess, because they’re all different ages, so it varies. One of the most complicated answers to that is our time, Chris’ and my time, because like I said the team for the most part is spread out between the products. Where we’ve noticed is Chris and I can’t really focus our mental capacity on all 3 at once. Depending on where the product is really varies on where we’re focusing our energy. To give you an example, when DeployBot was really new we focused a lot of our energy Chris and I on the strategy and the mission and why is DeployBot a product? How do we build it? How do we grow it?

When we’re doing really big features on Beanstalk Chris and I really focus on big … We’re doing code review and that was a big product and I was like all in code review, researching, talking to customers and that kind of thing and same with Postmark, because we can’t keep flipping around like that and grow all 3 products. We hired our first product manager for Postmark because we needed somebody who’s not taking 3 weeks off to focus on another product while that product needs strategic planning and thinking and customer development and that kind of stuff.

Josh: How old is Beanstalk?

Natalie: My God, it’s going to be 10.

Josh: As far as software goes that’s old, right?

Natalie: It’s old.

Josh: How do you keep from losing … How do you keep caring about something that could be old, compared to something new and shiny.

Natalie: Josh, that’s a million dollar question.

Josh: Right, yeah.

Natalie: Yeah. We love our customers very much and I will say, without giving too much away, we realize that we need to offer a product that was built in 2016 and not a product that was built in 2006.

Josh: Yeah.

Natalie: We’re actively making that shift.

Josh: Addressing that.

Natalie: Yes. Without giving too much away.

Josh: Sure, sure, sure.

Natalie: No, I mean listen, the company’s turning 16 this year. We’ve been … It’s the hardest part for us, is understanding the things that we built years ago, are they relevant? How do we keep them relevant? Are the problems we set out to solve that long ago, are they still the problems we want to be solving today? Are we solving them as well as we can today? As a company are we able to grow the business like we did back then the same we can now without making changes? The answer to that is no, but realizing that and adjusting has been really hard.

Josh: I think looking at a product, giving it … Looking at it and saying, “What’s the actual potential here,” and not shoving it in a corner. You think about Beanstalk, when it launched Subversion was the way to go, but now git kind of came in. You guys adjusted, right? I think it would have been easy to be like, “Okay, well that’s the end of Beanstalk.” I do think the flexibility there is important but I also think as a founder I know for me it’s so hard to not think of some new idea and then get hyper focused on it and almost forget about everything else. Think, “Hey, this new idea is the latest and greatest. Who cares about the old thing.” I- Go ahead.

Natalie: You’re right. I think what grounds you I think to some degree is when you have a team and you have responsibility to other people and you can’t really jump latest and greatest. One of the things that I’ve heard over and over again from advisors and another people I’ve talked to is, “I can’t believe you’re doing 3 products, double down on one, just pick one and go.” My answer is always, “I exist for my team and for Wildbit, not necessarily for an individual product.” That is providing us the means to run a company that we love and give us all a great life. I’d rather have multiple chances of success.

Josh: Sure.

Natalie: We could probably grow one very quickly but we’re choosing to grow 3 at a sustainable pace because that allows us more opportunities for market fluctuations and things to change, and nothing lasts forever, right?

Josh: Sure. Yeah, diversification, right?

Natalie: Right.

Josh: Also I can see it being interesting running a company like that, where it lets you shift focus and not become almost obsessed and get tunnel vision on a single problem, right?

Natalie: Right.

Josh: But it also seems … One product makes my brain hurt.

Natalie: Yeah.

Josh: Let’s backtrack a bit here and talk history. You mentioned you guys have been around for what, sixteen years?

Natalie: It will our sixteenth birthday, yeah.

Josh: That’s insane, especially when you’re talking about internet products.

Natalie: I know. We didn’t start as internet product.

Josh: Right. Chris basically was doing … Was it consulting?

Natalie: Yeah, Flash. Beautiful, beautiful Flash. Chris started it when it was 19. We’re in Philadelphia and he was doing night clubs and bars and restaurant websites.

Josh: Nice.

Natalie: That’s literally how we sta- That’s the core of it. He was not a very good developer so he found a guy in Romania and they started Wildbit. Chris started Wildbit and he started working with him and kind of evolved our consulting, which is more of what were known for before we got into products, was we were building social networks. That was a big thing for us. We did the Social Network Report and we had these big clients. That’s what we did for a while before Beanstalk, or before Newberry because there was that too, but yeah, before Beanstalk.

Josh: That’s right. You’re talking about hiring there. Your first hires were not in the US, correct?

Natalie: Correct.

Josh: Was that a practical thing from a cost perspective?

Natalie: Sure. Yeah. I think it was a practical thing from cost, from also resources, I mean this was 99, or 2000 I guess. It just worked. There was no risk. It was like, I found a guy in Romania on a user group and he can build it. I can design it. I’ll find the customers, we’ll work together. It also allowed us to find really great people regardless of where they were located. We still have remote today in the US and outside the country. It’s definitely not a cost thing for us right now, it’s about finding the best people for the job, which has allowed us to find anybody anywhere. Back then it was definitely cost, it was convenience. It was there, there was no risk and that kind of thing. Didn’t need an office, didn’t need infrastructure, you just work together.

Josh: Sure, sure, but at some point you guys decided to have an office.

Natalie: Yes.

Josh: What was the impetus for that, to saying, “Hey, we’re all remote,” to, “Hey, we’ve got an office and if you can it’d be great for you to be here?”

Natalie: I think there was a couple things. One Chris and I had a baby. Well I had a baby, Chris … Yeah, he was there. Working from home got hard and then I was looking for somebody to take over, so we got our own office. We just left the office and rented a little office for us. Then I hired Dana who was local in Philadelphia to take over the support for us. Then there was 3 of us. She would come into our house and work out of our spare bedroom. It was like, “That doesn’t make any sense,” so we were like, “Let’s get an office.”

That felt like becoming a real company. It was like, “Let’s just do it.” We get an office and we started hiring some people in Philly. We filled it up, it went from a couple to 3, 4. At the same process we were working with some contractors in Russia, some of the guys, and really needed them to be in the US. We were learning so much about the collaboration that was happening face to face in the same time zone, that was so productive so us that we started working on H1B Visas. That’s how we brought 4 families to the US.

Josh: Do you think … Was it … When you mention the collaboration stuff, is that purely, actual being in the same space collaboration or just the timezone thing was so hard?

Natalie: I think if I look back on it now it was artificial. A lot of it had to do with back then the guys were maybe a little more shy with their English, we weren’t getting on video calls very often. It wasn’t as easy. You could get on video calls, it’s not like it’s hard but it wasn’t like a quick button, it was a whole process. It just felt like we weren’t having these simple conversations, quick ideas, things like that. When they came here it felt very much like, “Wow, look at how much more we’re getting done together.” Riffing on ideas and getting things …

It was awesome, but now I look at it, half team’s remote, more than half of it’s remote, and we have fantastic conversations, fantastic ideas. Garrett and I are on the phone for hours at a time, just thinking about stuff and whatever. I think had we been more interested in video calls and making an effort it would have been just fine, but we didn’t realize the difference back then, so for us that wasn’t even a conversation, this was as good as it got. Now I know what the difference is and now we’re all about, “Just jump on a call, just jump on a call, just get it done.” I don’t think it’s a valid thing anymore, it just felt more valid back then.

Josh: Right, right. Playing off of that, how old’s your new office? How old is it? A couple years?

Natalie: One year.

Josh: Okay, so one year.

Natalie: Yeah.

Josh: Now you guys were very intentional about not doing the startupy open space thing.

Natalie: Yes.

Josh: You guys didn’t go middle of the road here either with cubicles and whatnot. You gave everybody their own office with a closeable door. Is that right?

Natalie: Yes, that’s correct.

Josh: You’ve done that, having the collaboration of being in the same space is great. Do you feel like that, the whole closed door thing, removes a little bit of the collaboration and you find you’re still chatting with people in the same office on say Slack or whatever chat you guys use?

Natalie: No. I guess it depends on what you’re looking for. We only work 40 hours a week, right?

Josh: Yeah.

Natalie: Our preference, the majority of us, is to spend that time doing our work. The real deep focus work that we’re all experts at. Developers want to be coding, designers want to be designing, support wants to be doing support. That’s what we do. That’s what the benefit of working remotely always provided to people, there was no distractions. You’re working in your home and aside from having a meeting, and hopefully Slack’s not blowing up, you’re fine.

To that extent I don’t think we’re losing any collaboration because it’s happening in more organized spaces or meetings and things like that, but we get to have lunch together everyday. We have a chef who comes in and cooks us lunch every day. We meet at the coffee machine. We’ll pop into each other’s office. I think there’s still … We have happy hours and things like that. We’re still together but we definitely wanted it to feel … We didn’t want it feel like we’re distracted all day, we wanted it to feel like you’re working from home or remote, just like everybody else. You can close your door and you can focus, and when you’re ready to come up for air you do. I have a friend who’s like, “I work 10 hours a day.” I was like, “Why do you that?” He was like, “Well, by the time I come in and dadadadada,” he said, “By 3:00 is when I sit down to work.” I was like, “Well that … “ You know.

I hire people all the time who are like, “I want to work remotely.” I’m like, “Why do you want to work remotely?” “Because I can’t get anything done in an office.” I’m like, “It’s not the office, it’s the environment. It’s because you’re a developer, you want to focus. Everybody knows how long it gets to get into that focused zone and then to be distracted it costs us all a lot of time and money.” I think it’s perfect. I wouldn’t change it. I don’t think I want … People say that you might miss the random ideas that happen by the water cooler. I haven’t noticed anything where that’s missing.

Josh: Yeah, yeah. When it comes to hiring people who are remote, have you found … I know for us I found that hiring people who have never worked remotely before, the chance of that succeeding, us being their first stab at working remotely, is a lot lower. Has that been the case for you guys or do you feel like it’s anybody can work remotely kind of thing?

Natalie: I think that you’re right that the chances are … It’s harder, but everybody needs their first short to work remotely to be able to work remote, to be experienced in it, right?

Josh: Yeah.

Natalie: What I look at more is what is their physical work environment going to be like? What are they hoping to accomplish? If I get on the phone with somebody and they’re like, “I really want to work from coffee shops and run around and be in a million places,” I probably won’t hire them. If they want to work from their couch, I won’t hire them, because again it gets back to having an opportunity to really focus and to close the door and to have that opportunity to really get into your flow and really, really work. It cannot happen if you’re constantly distracted.

I have nothing wrong with coffee shops, everybody needs a change of scenery. Especially when you’re remote you want to see other humans and talk to them and all that, so like totally get all of that but if the majority of your work can’t be done in a place where you can get up, shower, get dressed and have a reason you go into the office and close door, especially if you have kids. Oh my God, that’s crazy, right? You need to be able to close the door, work and then leave at 5:00 and close the door behind you and be home. To me those are much more important things, I have people on the team who we’re the first place they worked remote and they’re kicking ass. I think the hardest part on my side is to enable them and to remind them to go outside, to go find some people, to get coffee, talk to their wife or husband. That’s been more of my job, is to not let them get to deep into the basement, you know?

Josh: Yeah. In mentioning kids, do you guys have one kid or 2 kids?

Natalie: We have 2.

Josh: 2, all right. How do you guys balance … Obviously if you’re going to the office there’s a little bit of physical separation there. How do you and Chris keep from thinking about work all the time?

Natalie: We always think about work.

Josh: Do you feel like it’s a negative or it’s been a core part of everything for so long?

Natalie: You know, it doesn’t stress us out. I think one of the nicest things, we had 9 months where we didn’t work together in our 13 years together and those were the 9 months were we fought the most. What we realized was it’s when we’re both focusing on 2 completely separate things that it gets complicated. That’s when you start getting, “Stop talking about work,” or, “Stop working,” or whatever. What we do is, our kids … We come between 5:30 and 6:00 and until they go to bed we don’t open a computer, we rarely pick up our phones for anything other than to take their pictures. That’s our combined, our joint effort. That’s what we do.

We might be thinking about it in the background or whatever. 9:00 when everybody’s in bed we’ll probably talk about work or we’ll watch a show or whatever. I think because we’re both focused on the same problem, if something’s down and Chris needs to work I’m not mad at him, “Go work.” If I had to do an interview with somebody at the end of the day, I do an interview. We’re focused on the same issue and this company has allowed us to have a nice house and raise 2 kids and send them to great schools and all the stuff, so I owe it as much attention as I feel comfortable giving it. I don’t know.

Josh: It’s not a negative for you guys, right?

Natalie: Yeah. I don’t think it’s caused any harm.

Josh: If anything it’s almost like you’ve got this common goal or thing that you’re working together towards.

Natalie: Yeah, it’s our family business. It’s giving our family a way to live and to eat and to travel. We’re very grateful too.

Josh: Yeah. One thing that you guys did and I don’t hear about many people doing, and this is probably because most literally can’t do it, but is you guys do profit sharing.

Natalie: Yes.

Josh: What are the logistics of that? I’m curious, how does that work? Is there like a sliding scale, is there a certain percentage of profits, et cetera?

Natalie: Yeah. I try to keep it as simple as humanly possible because I have a part time book keeper so I can’t be doing anything crazy. Basically the way we looked at it was, it’s 10% of profits split equally amongst the entire team and your vesting is 6 months so you get it in your third quarter with the company. It’s done quarterly. The reason we did it equally is because in my head and Chris’ head it’s everybody contributes equally, regardless of how much money they make and regardless of how long they’ve been in the company.

Josh: Do you feel like it’s a major selling point when you’re hiring? Is it just a nice extra?

Natalie: I don’t know. I think it’s one of those things where, and I’ve watched this happen as I’ve hired, in good quarters it’s a dramatic amount of money. We could go a year where we’re like in a heavy investment year and the profits are lower and it’s not a dramatic amount of money. I think, and I’ve talked to the team about this and they’ve all reassured me, because when I’m not giving big profit sharings I get all upset. They’ve all reassured me, like, “No, it’s a nice-to-have. It’s not a need-to-have. We’re not all sitting there depending on it.”

I think what’s more valuable is that I’m extremely transparent with our … I run a P&L and we do a quarterly meeting and I show them the P&L. In good and in bad they can see everything, and I think that is much more of a powerful driver. I’m sure people get hired … I mean I use it, I put it on my offer letter, like, “Here’s your base, here’s the profit sharing, here’s what it was last year, here’s what it could be potentially be this year.” I don’t guarantee it because I can’t.

The one thing Chris and I do do is the P&L excludes anything that we draw from the company, so it’s actually a little bit inflated, but I always felt like my choice to pay myself more or less should not affect how much my team makes. You know what I mean? It’ always like … Yeah, it’s just a little bit inflated. It’s not like it doesn’t include our salaries.

Josh: Right. Is it in the form of a bonus, like a one off check basically?

Natalie: Yeah, it’s just a bonus in payroll.

Josh: Got you. Do you find that people who are potentially looking at getting hired … I guess it plays no real role in how much they’re compensation is, correct? As far as their salary goes.

Natalie: No. It could be 10% of their salary.

Josh: Got you.

Natalie: It’s significant. It varies, depends on the salary. For some people it could be 20% of their salary.

Josh: Do you have quarters when there’s not any to share?

Natalie: Yeah. It wasn’t nothing but there’s been quarters it was low, like when we built the office out. We had these dramatic capital expenses. I actually amortized them over a year so that it wouldn’t be such a big hit. I try to keep it over a certain amount. There’s been a couple quarters where I was disappointed so I actually paid into it to make sure that team got at least a minimum amount but that’s not sustainable, the team was like, “You can’t keep doing that. That doesn’t make sense. We have good quarters and we have bad quarters, you’re not going to pay us less when we have really good quarters. Let’s just look at it realistically.” I have a really, really great team.

Josh: Yeah.

Natalie: I think the problem is it’s the way I’ve always looked at options and profit sharing. I’m very aware of it when I try to hire people. It’s not guaranteed so you can’t go home to your spouse and say, “It’s going to be X, but that includes profit sharing.” Profit sharing is not guaranteed, so it’s going to be without profit sharing are guaranteed and then hopefully great, we get a really nice bonus at the end.

Josh: Yeah, yeah. Have you done profit sharing from the start or has that been more recent?

Natalie: It’s more recent. It’s the last couple years. We used to do this thing which is insane, which we would give 10% raises twice a year, which …

Josh: Wow.

Natalie: Yeah, that was insane. That quickly became unsustainable because as we know maths. That was when were kind of like … I mean, we were growing and it was like Chris and I had a salary and there’s all this extra money. We were like, “We’re not going to hire 3,000 more people.” We were like, “Guys we’re making more money, everybody has to make more money,” so we just kept bumping everybody’s salary, like, “Look, I’m making more money, making more money,” but then exponential math and all that. It’s not feasible.

That’s actually where profit sharing came from, was like, “How do we keep that going but tie it to something so that in case … I don’t want to disappoint somebody one quarter or every 6 months because it wasn’t so great.” We turned it into profit sharing. For the most part it was the same and more, but it was tied to something so when those quarters, when they weren’t so great, like we were building out an office or whatever, then it wasn’t so great and it didn’t cost the company a ton of money for no reason.

Josh: Does it replace in any way raises or anything like that?

Natalie: No.

Josh: Okay, so it’s in addition to that.

Natalie: Yeah.

Josh: That’s cool. The profit sharing stuff is super fascinating to me. For Wildbit what’s the hardest problem you guys have right now? What’s the big thing that you feel like keeps the team up at night?

Natalie: Growing Postmark.

Josh: Postmark, it’s not the most recent product, right?

Natalie: No, DeployBot is.

Josh: What about Postmark? Is it a bad keep-you-up-at-night?

Natalie: No, it’s crazy exciting.

Josh: From a growth standpoint?

Natalie: Yeah. Postmark is amazing. It’s just different. It’s like when you build products that max out at $200 a month, you know exactly how long it’s going to take you to get to X. It’s not going to change. Postmark because it’s transaction based and because we have some amazing customers, we can support if somebody pays $1.50 a month but we can support if somebody pays 5,000 a month or 10,000 a month. We’ve established this amazing reputation in the market thanks to these incredible customers that we’re the best. We have the fastest email delivery.

We’re the only ones who deliver extremely fast, deliver to the inbox 100% of the time and we’re focused on transactional email. We’re growing but it’s also that energy and excitement around it. It’s on us to sit there and say, “How big do we want to scale it?” Because we’re also very expensive, which has allowed us to grow at a sustainable rate, because I don’t want to turn something on and be like, “Oh man.” It’s on us, all of us on the team and Chris and I. It’s like, “What do we do? What’s the plan? What do we do? How do we keep it going and become affordable for as many people as we can, but for the type of customers that we want, to maintain the company that we want?” There’s a lot of questions, the product direction and all that stuff. It’s really exciting.

Josh: Obviously growing revenue is an enjoyable thing. Do you find, since you guys are profitable, that the revenue side is maybe less interesting and so there’s some metric around a product that’s more interesting to you, or is it just the fact that profitability wins all?

Natalie: Number 1 is profitability, not necessarily revenue but profitability. I can affect profits either by making more money or spending less money. That’s all, that’s the way it goes. That’s important to me because ultimately like I said, I’ve got to make sure that we all have a place to work in 10 years. Products are theoretically irrelevant, we will build whatever we need to that gets us excited that provides a ton of value to our customers and allows us to collect the money for each that we can be a business. That’s what matters, but I think what we get really excited about is building a product that people love.

I mean that, we don’t want to build things that people are lukewarm about, we don’t want to build things that people are bored of or have any negativity around. It’s like watching Postmark become this beloved product for some amazing companies, big and small, and see the excitement that my team feels building it and all that. It’s really exc- And the revenue potential, it’s amazing. It’s been a lot of fun. We look at a lot of that stuff too but ultimately if people are paying us it’s valuable, so that’s all that matters.

Josh: All right, good deal. I think that’s all I got. How can people get in touch?

Natalie: Just natalie@wildbit.com, @natalienagele on Twitter, but it’s pretty easy, I’m around.

Josh: Good deal. Good deal. Thanks for taking a few minutes to chat Natalie.

Natalie: Absolutely, thanks Josh.