“Are you in it for the Long Haul?“
Roan is the co-founder, and since 2021, CEO of FreeAgent, a SaaS for small business accounting. It grew over 15 years – ticking every box on the financing bingo card along the way – bootstrapped, crowdfunding, IPO, VC, Angel and finally an acquisition.
Before Roan co-founded FreeAgent, the largest company he had worked in was a four person web agency. He started as the product person and is now CEO – and the only founder still in the business.
Roan shares what he has learned about personal growth, development, and learning in an entrepreneurial journey that has gone from three co-founders who hated the idea of running a company of 50 people, to 270 people today.
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Thanks very much Mark. Good morning, how y’all doing? It’s great to be back at speaking on in person event, really excited about this has been I’ve been waiting for it for a long time. My name is Ron Lavery. And I’m one of the co founders and the CEO of a company called FreeAgent. We are an online accounting software business, we’re based up in Edinburgh. And we’ve been around since 2007. So it was actually our 15th Birthday back in February. So we’ve been around for a while, obviously, I’ve been with the business for that entire length of time. And today, I want to talk about what it means to be motivated both as an individual and as a as a founder of Business, but also how you keep your own company motivated, especially when you’ve been doing that for a prolonged period of time. So it can be quite challenging to think.
Just before we get started, do I want to just like talk about an existential crisis that I had, I just want to, I just want to kind of like get this off my chest and get out there. And then we can get on to the useful and practical stuff later on. But I think it helps out a little bit of the context for some of the things I’m going to talk about in a minute.
So the year was 2013. I’m sure we all remember it well, simpler times, right? William and Kate just welcomed little baby George into the world. Andy Murray, my fellow countrymen of mine just won his first one within championships, and Frozen had been released so it was a pretty good year all in all, you know? From FreeAgents perspective, we’ve been around for about six years at this point. And things have been going pretty well, you know, company’s been growing, we’re probably around 50 to 60 people. And growth was good. We were doing 100% year on year, we’d be named as one of the fastest growing tech companies in the UK. So things were really ticking along pretty nicely. And then out of the blue, we got contacted by a very large American competitor of ours. If you know this space- accounting software space – you can probably hazard a guess who that may have been. And they wanted to discuss acquiring our business. And so they flew over from America took us out to dinner, big brash Americans Oh yeah, we’re gonna do this thing, and he slapped this good offer on the table. And it was like a really, you know, a really generous offer to buy the business and woud hve made the cofounders all three of us here a fare of money at that time.
And you may think that this would have been a really exciting prospect, you might think there’s been a really exciting time to suddenly land big prize, you know, the big start up dream. But I remember that my overriding emotion from that time was one of actually being really miserable and being quite depressed. Now, like, again, we’re thinking world’s smallest violin. Poor Founder who’s gonna make loads ofmoney? You know, I get that right. But I couldn’t help the way that I felt. And it sent me down this real rabbit hole of soul searching? I think it was, why was it that I felt this week? Why was I not more excited about the prospects of, you know, landing that big start up dream? You know, why was I quite miserable about it? And was it really going to make me happy? And if it wasn’t going to make me happy, then what was going to make me happy? And it sent me down this whole kind of thing was quite quite a confusing time.
Now, as it turned out, we didn’t sell the business at that point, it wouldn’t have been the right thing for the company. And so we continued on on our journey continued to grow the company. And I often sort of say that we’ve ticked every box and the startup bingo scorecard. It said were founded back in 2007. We bootstrapped for the first couple years, you know, we’ve worked on the company just in weekends and evenings and things like that,did our first angel rounds in 2009. And over the years with a VC raised a debt funding for the crowdfunding round in 2015. And 2016, we took the company public did an IPO and the one that enmarket. And then, most recently, in 2018, we did sell the company, so it was acquired by the NatWest group.
And so that was four years ago, nearly four years ago that the business was acquired. And obviously, I’m still with the company today, the two other co founders have since moved on, but I’m still running the business. And this is quite a surprise to people. I know it was a surprise to Mark, when we were talking about doing this though he was “oh, you’re still with the company?” Because that is not the usual narrative is the usual narrative is that you sell your business, you serve your earnout, one year or two years, wherever it was, and then not you, you’re off sailing off into the sunset. But I’ve decided to stick around and run the company. And I want to talk about what that means so what is meant for my motivation over this period of time over these 15 years. Because what motivated me is a guy and his early thirties, just like starting out this little side project. It’s very different from what motivates me today as a CEO of our company of 270 people. So I’m going to talk about that journey.
Just before we get into things want to give you a really super quick User Guide to this talk. So at the bottom of some of the slides, you’ll see a couple of icons, when you see the magnifying glass will be some keywords after that, and their search terms, if you Google those, then you’ll find more information about the topic that I’m on and the talk, maybe articles or resources or papers or things like that. And then we see the camera icon, they’re basically going to be the key takeaways. And it’s all so if you want to take a photograph of the slides, you can refer back to them later.
Okay. So I think when it’s talking about motivation, it’s really important to understand, there’s actually quite a multifaceted thing. There’s many, many different layers to motivation, and we get motivated in different ways, and from different sources. So at the very centre of all, clearly, we have our own sense of individual motivation, what personally drives us. And there’s a couple of different aspects to that, which I’m going to talk about. Then we have the motivation that we derive from our immediate team that we work with, you know, for me, that would be like the exec leadership team, but maybe a different team that you work with on a day to day basis. And really, what’s the purpose of that team? What does our team’s what’s it there to do? And is that something that motivates you? And what your colleagues like? Are you motivated by the people around you? Are you motivated by your manager because that can really make or break your motivation, Right? Then you have obviously the company? And is the mission of the company, something that motivates you?
Now, if you’re a founder of the company, you’d like to think so right? But is it something that you still feel really passionate about? And then I’ll spend quite a lot of time talking about culture as well, because I think this is one of the most foundational things that can really sustain, not just motivation for you, but for everybody. So I’m gonna spend about time talking about that. And finally, we have the widest one of all just like, well, what is the change that you want to affect with your business? What is the impact that you want to have in society, and that wider purpose as well, and I’m going to talk a little bit with that.
I’m going to start off with this individual, because I think this really, you know, a very much, what you’re saying is, is very much at the heart of all. So we talk about individual motivation. Now, some of these things here would apply to anybody that works in an organisation, but a bunch of them are much more founder specific. So can I just ask, you would sort of self identifies as a founder here? Okay, so we are quite quite a lot of folks here, so maybe you can solve hopefully relate to some of these things. And I’ll put them into a couple of different categories here. And in this selfish category, I’ve got this idea for ownership. And this idea that you and your co founders, you know, you’ve created this little business out of nothing, you came up with an idea, you maybe prototype something, you built a first beta test of it, you got into the hands of customers. And that idea that as your baby, you know, you quite often hear that expression, don’t you it’s your baby. So I’m going to talk about what that means in terms of motivation, then, obviously, we have this like dream of the financial freedom, you know, the selling your business, making all that money, a potentially life changing event. Clearly, that’s a huge motivation for some people, we’ll talk about that. I think there’s this thing about status and sense of identity that comes along with being a co founder as well. And I think we should just be honest about this. You know, certainly within our industry, but even as society at large, being a founder of a tech company is actually something that confers a sense of status to it, you know, we make Hollywood movies about tech companies and entrepreneurs these days, it’s quite a bit of a glamorous thing. And certainly I know a lot of cofounders who really are quite motivated by the sense of identity, they get out of that. And it’s worthwhile just being honest with that, because, you know, that can be something that drives us.
Then we’ve got what it is that we do in our day to day jobs, you know, what’s your role, if you’re the CEO, or the CTO, whatever it is, Are you motivated by that is that something that you feel energised about, you’ve got this idea of accomplishment. So setting yourself goals and and achieving those goals. And moving on to the next thing. And moving on to the next thing. And I’m going to talk about goals and quite a lot as well. And finally, we have this thing about personal growth. I think this is a really interesting one. Because I always say that, as a founder, you have this almost unique privilege, because you get to grow in scale and personally develop as your business does the same. Some other people in the company get the opportunity to if they’re like, really, really early employees, but nobody gets it to quite the same level, I think, is one of the as one of the co founders. So I’m going to talk about how the opportunities that personal growth, the lows.
And these are all the things which in the in the selfish bucket here know, what I think is really important that you say is that there’s nothing wrong with having selfish motivations. And we all have selfish motivations. And that’s totally fine. But also, you know, we probably all like to think that we have altruistic ones as well. And when you start out on this journey, you’re probably trying to scratch an itch, you are probably you you foresaw an opportunity or you saw a problem. And you think, okay, we can make this better by building wherever it is that we’re going to build. For us. We’re all freelancers, developers, contractors, consultants, we all work for ourselves. And we knew how difficult it was managing our finances. So we wanted to build something that would help us but also people like us as well. And that’s how we really thought about making a really small dent in the universe, you know, making our mark and that’s a big motivation, and something that would ultimately you like to think at least improve society in some in some small way.
But you may also just be motivated by building a great company as well. Again, I think founders have this unique opportunity that you get to build the type of company that you want to work for. And that’s an amazing privilege. That’s an amazing luxury. So we’ll talk about that.
I’m going to dive into a few of these things in a bit more detail now and the one on one talk about it. First of all, is this idea of ownership. And this idea of that it’s your baby, right? That you have this feel and sense of this is your thing, you know, you your co founder period together. And obviously, in a very literal sense, when you start out, you do own the whole thing, you probably own the entire company between you, your co founders, at least the vast majority of our anywhere. But if you do grow the business, and you do investment rounds, and you raise money, then you’re selling equity, and in a quite literal sense, over time, you will own less of the company, you know, you will be diluted.
And if you do end up selling the business altogether, then you will not own any of the company at all. Today, I don’t own any of FreeAgent whatsoever. I’m just another employee. But this idea of ownership and this feeling of ownership isn’t tied to the cap table. I think it’s all rights are tied to something else. And this was something that I definitely observed that over time, as the business grew and grew, it felt like it was less my company. And it started to feel like I was more this smaller part of something much bigger. And that was an interesting thing to reflect on over the years. And I think that the reason for it is, it’s like when you first start out, when there’s maybe there’s like, you know, for this, there’s three of us, but maybe there’s five of you, or even like you’ve got a small team of 10 people, you’re going to know everything that’s going on in that business, you know, you may not be actively involved in everything that’s going on, but you’re least going to know what’s going on. But as the business grows, you know, you get to 30, 50, certainly by the time you get to 100 people, you’re no longer going to know everything that’s going on in that company. In fact, you know those things, which I find out though, which is Oh, yeah, we’re doing this thing and I’m like are we? I had no idea we are doing that thing.
And that’s just as natural consequence of a company growing and scaling. But the way that I sort of reacted to that was over time, it just felt like, Do you know what I always just now, even though it was still a co founder, I was still just something small of something which was, which was much bigger. And so that sense of ownership really decreased over time. And so if your motivation is tied to that, how’s that going to feel when you don’t feel like it’s all about you, or this is all your thing? I’ll come back to the wee bit later on.
But then obviously, we get to this, this allure of the exer you know, I talked about that existential crisis. And then, you know, the big startup dreams, so many of us, you know, what we’re kind of aiming for, and it is really important, we have to talk about this, because, you know, it can be an absolutely life changing thing. But like I said, before, you know, it was something that when that became a reality, or a prospect of a reality, for me, it was something that I really, really struggled with. And that sent me down this path of thinking like, Why Why was this like, so confusing for me. And what I realised was that subconsciously, I’ve actually been quite motivated by this. Now, I say subconsciously, because I don’t particularly regard myself as being a materialistic person. But I think when I set out on this path, way back in 2007, I’d invested in it, I felt I had to win, you know, if I was going to do something, I had to win at it, you know, and that goes all the way back to my childhood and some of the things that went when I was growing up. And how do you win at doing a startup or sell the company thats how you win? What sort of general wisdom is right?
But then going down this route of thinking about this, I was thinking, Well, is this really going to make me happy afterwards. And I came to the conclusion that you know, that I wasn’t, it wasn’t really going to be a thing that was ultimately going to make me happy. And then what came next after that? What was I going to do then. And then I had to really think about what my motivation was going to be afterwards. Now, as I said, before, you know, we didn’t sell the company at that point. But going through that process back in 2013, means I was able to process this stuff in a way that when it did happen in 2018, I was much more prepared for it. And I was really, really ready, and I could actually go to enjoy it. Now, I do like, I want to really have a caveat of this. I know, like whining about this, like sounds like it’s an incredibly privileged thing.
Most people will never even get this opportunity. You know, and it’s been, don’t get me wrong. It’s an amazingly fortunate position to be in. But there is a psychological impact of this stuff that I think people don’t often talk about. And so I think it’s worth considering. If you’re ever fortunate enough to go through that process, how are you going to feel and how are you going to be prepared to go through that because it can be quite challenging.
Okay, so let’s come on to something which is I think maybe most of us can relate to, and this is the idea of personal growth. And is this idea that as a co founder, as I said, you have this almost unique opportunity to grow and scale along with your business. And hopefully if your business is doing well, you know, you’re growing, it’s getting bigger than what you see is that the needs of the business are going to increase over time, you’re gonna have more people, you’re gonna have more teams, gonna have more processes, you’re gonna have more problems, all of this kind of stuff. And it’s not going to be a completely straight linear thing, you know, there’s gonna be times when your business is absolutely taken off, and it feels like a rocket ship, and everything’s out of control, and you everything’s breaking, you don’t know what’s going on. And it’s maybe going to be other times where plateaus a while and it’s coasting along, everything feels pretty stable and secure. And obviously, what you hope is that your own individual abilities and skills are levelling up alongside that business. But again, that’s not gonna be a completely straight and linear thing either. And because there’s going to be times when you feel like your abilities are below that of the business, you can’t keep up, you know, you’re not on top of things. And there’s gonna be other times where it feels that your abilities are above that of the business, and how’s it going to feel and each one of those states.
So, if your abilities are above that of the business, you’re going to feel like you’re in your comfort zone, right, you’re going to feel like, you know, you’re on top of everything, and you’ve got a good handle on this. But if you stay in for too long, you might start to get a bit complacent may start to feel bored, you may start feeling that your own personal growth is stagnating, and how is that gonna feel? How’s that gonna impact on your motivation. But conversely, when your abilities are below that of the business, you’re definitely not gonna feel your comfort zone, you’re gonna feel really challenged, you’re going to feel maybe out of your depth. If you’re there for a long period of time, you might start feeling stressed, burnout. This is where things like impostor syndrome might start to kick in, or it might not be impostor syndrome, you may just be genuinely shit at your job.
And that’s a reality, as well. And you just need to be really honest about that. And you need to have these difficult conversations with yourself. Now, I’m not saying it’s wrong to be in either one of these days, in fact, you will probably what I think is healthy is that you oscillate between these states over time, but it’s probably not really helpful – and healthy – if you’re in one of them for too long.
You know, quite often, I say that sometimes people outgrow businesses, and sometimes businesses, outgrow people, and that’s just true of about founders, as well. But you need to have that honest conversation with yourself. I think from FreeAgents perspective, we were quite lucky in this regard, because the business had good growth had strong growth. But it wasn’t this crazy, overnight hockey stick explosive growth where everything just blew up. And that from a financial outcome point of view probably wasn’t the best thing in the world. But from this perspective of personal growth, allowed us to individually level up and scale and mature, at a rate that was probably about the same as the business. So we were never like, either too comfortable, or too stressed all the time. Although there was there was definitely periods of both. So I think this is a really important one for understanding where you sit on that motivational scale.
And then there’s the idea of a purpose, which I think a lot of us can really identify with the meat scene. Anybody seen this cartoon before? It’s really funny. So yes, the planet got destroyed. But for a beautiful moment in time, we created a lot of value for shareholders.
This is funny, right? You know, it’s funny, and I think it speaks to probably the cynicism that many of us have about late stage capitalism, but it’s not really true, is it right? It’s not, I refuse to believe that there are genuinely lots of people in the world that are motivated by creating shareholder value. I just don’t believe that, right? If I don’t believe that many founders are even motivated by profit. A great quote from Peter Drucker here, he says,
“profit is not the purpose of a business, but rather, the test of its validity.”
And yet profits, important, growth is important, these things are all good, but only because they litmus test the sustainability of your business, have you built something that will last? That’s important, okay. But again, it’s not the purpose of your business, it’s not the purpose of why you started this thing in the first place. So let’s talk about that. So let’s talk about how you identify what your purpose is. And then how you think about communicating that to the rest of your organisation. So we have this idea about personal motivation, not personal sense of purpose, what is it that you want to achieve? And you set out to do, I was chatting with Joe. And for me, you know, as somebody who came from a creative background, what I loved was this idea about making a product, making a thing, and getting it out there and see what people thought of it. That was something that I felt was incredibly rewarding to me personally.
And then it brings us on to this question here, but what are you most proud of this is something that, you know, I periodically been asked over the years. And I would always give the same answer. And I was tied to that thing about my personal motivation. I would always say, oh, it’s the product that we make, and it’s the impact it has on our customers lives. And that’ a good answer? You know, when people were pretty pleased with that, when I had the added bonus of actually being true as well. But what I noticed was that over time, my response to that began to change a little bit. Now, I’m still really proud of today the product that we make and impact it has and customers lives. But when I think about what I’m most proud of when I think about you know when I’m looking back and 10 or 20 years time or whatever, what I think my legacy is going to be, is actually going to be the company that I’ve created. And that was a bit weird, because I’ll be honest with you, when I started out in this journey, I just saw the company as a means to an end, it was just like, Yeah, of course, you need some people, and you need teams, you need to have like an office and stuff. But that was just all there in service of building this awesome thing and getting out there.
But that’s flipped for me. And that’s a bit weird, because remember, I talked about before this whole idea of ownership, and not my my sense of ownership and the business decreased over time. And I’ve kind of observed that as my sense of ownership decreased by pride in the business increased. And that may sound quite self like counterintuitive, or quite ironic. But I do think they’re very, very tied. Because as I began to think of myself, is just the smaller part of something much bigger. That was almost liberating in a way, and it was almost amazing to think I’ve created this thing that was now bigger than just me or the other co founders, and that we were no longer indispensable, and that this thing would go on and hopefully thrive, long after we had left the business. And that was something that I actually found now, I feel it’s really great, you know, and been able to sort of create a company where people want to work and feel like it’s a great place. And that’s something that I think gives me a lot of pride today. You know, we had our we had our office Christmas party, very belated Christmas party on Friday night. And when people come up to us the original, this is the best place I’ve ever worked. And I really feel included, I feel listened to like any other place. And I got a huge sense of, of prayer that just No, but obviously, that’s changed over time. But what a sense of purpose is really changed for me.
What I think is really important is that you ask yourself this question, what are you most proud of, and you have that conversation with your co founders as well. Because obviously, when you start on this journey, you should all make sure you’re very well aligned, what you want to achieve. But you also have to realise that it will change over time. You know, what you’re most proud of what you’re motivated by even your personal circumstances, what’s going on for you in other parts of your life, all of these things will impact. What you know, fuel today is that sense of driving motivation. And you need to keep on having that conversation with your cofounders are in order to make sure that you’re always aligned. And if you’re not, they need to have a conversation about what you’re going to do. So have that conversation, think about and make sure you’re having overtime as well.
And then you have this idea, but okay, well, if you are aligned, and you have a real sense of purpose, how do you use of I take that to the rest of the business? How do you lay out the mission of the company in a way that’s going to motivate the rest of the team as well. And I think these first three questions are really the key ones. And quite often you see these encapsulated and mission statements, right? So we have a mission statement at FreeAgent, and it’s to help UK maker businesses be happier and more successful by putting them in control of their finances.
And it really somewhat like ticks these first three boxes here. So who are you helping – for us, UK our businesses. How are you helping them – we’re putting them in control of their finances. And what impact you want have, we want to make them happier and more successful.
And the key thing here is that is it pitch to the right level. Because if you pitch it to low level, you know it for us that maybe we make great accounting software is too mundane, it’s just not really very exciting. It’s not going to get people motivated. But then if you pitch it too high a level, like make the world a better place, then it’s too wishy washy, airy fairy, that’s not gonna really, it’s not specific enough to what you do your business, and how you’re different from what other people were doing as well.
So why things are important is that you get it out right level, and ultimately, you know, a level that’s going to inspire the people in your organisation. And this really comes on to the section where I talk about motivating the rest of the company as well. So I talked about the mission there, we’re going to spend a little bit time talking about goals and the culture in a second. I want to start with this quote here. And this is one of my favourite ever quotes by Antoine de Saint Exupery, who, as I’m sure you all know, was the author of The Little Prince. And he says:
“If you want to build a ship, don’t drum up the man to gather wood, divide the work and give orders.
Instead teach them to yearn for the vast and endless sea.“
I love this quote. I think it’s beautiful, I think really evocative, it’s really romantic. And there’s two words in this quote, which I think are really make it for me, they’re really fascinating. And that’s fast and endless. And what I really like about these words is that they’re almost completely the opposite of how we normally talk about business on a day to day basis. Because when we’re talking about business we need to get specific don’t we? You know, we talk about setting our OKRs and we’ve got our KPIs, and we’ve got our scorecards and we’ve got our smart objectives. And we’re quantitative or measurable or really sounds like everything is sort of by the numbers, and here you have these two words fast and endless, that just seem to fly in the face of their unknowable unmeasurable, you know, unfathomable. There’s something I really like about that.
And it brings me on to something I just want to talk about really briefly, and that’s language and how we use language and how the words that we use and phrases that we use, quite quickly capture and define and frame a problem or something that we’re talking about. Now normally, that’s obviously a good thing. But sometimes that can be an unhelpful thing as well, you might know this guy, Simon Sinek, you wrote the book, Start with why, which is all about finding your mission and purpose as an organization’s great book. He also wrote another one called infinite games. And in this Simon says that there are two different types of games that we play in our lives, there are finite games, and an example of a finite game would be something like a football match soccer match if not from UK, and a football match. You ever noticed a number of players and you have this equal players on either side. And we know where these are at, you have fixed rules and a football match, there’s a clear endpoint lasts for 90 minutes, extra time. And there’s an obvious winner and loser at the end of it. Now you can get a draw on a football match, but you get the idea.
But then there are things called infinite games and Simon says that business is an example of an infinite game. Now in an infinite game, the players change all the time. They’re not fixed, you know, so new players join the game – startups. And players leave the game, you know, as businesses go under or go bust. So they’re constantly in flux. There’s no time limit. It’s not like like, we just see, right, that’s it, businesses over tally up the score doesn’t work like that. It just keeps on going right? There are no fixed rules. It’s not like everybody gets the same amount of money at the beginning. And it’s just like, who will use it doesn’t work like that, right? It’s not fair. And there are no end point, no clear winner or loser or that. And as I said you’ll probably all understand this right. But then, so much of the language that we use is couched in terms of these finite games.
So we talked about achieving goals, we talked about hitting targets, we talked about beating the competition, this language really comes from these concepts of finite games. And that’s, by and large, fine. But it can have some little bit of this weird consequences sometimes. The classic example I see this all the time. So it’s your your salespeople who are going to hell for leather to meet their targets and cause by the end of the quarter, it’s q1, and they’re doing everything they can to like meet their meet their targets. And that’s great, right. But oh they’re doing is bringing in deals from q2 by a few weeks to get them across the line, which doesn’t need to make them harder for hit their targets in q2, and then they go through the whole process, again, of bringing in the next deals from q3. And if you were to zoom out and take like a macro view that you like, no point. It’s crazy, right. But we do that all the time. And it’s a consequence of the language, at least partly the language that we use, and how we motivate people through goalsetting. So that’s what I want to talk about is this idea, but how we how we use goals.
I’ve got a bit of a love hate relationship with goals. On the one hand, I think that can be very, very powerful. And as a leader, there’s certainly lots of times when you know, you’ve set a goal for the business setting ambitious target, and you can see how it rallies everybody can see what motivates people will go towards that. So they can be great. And clearly, they can be really good at creating a sense of focus. These are the priorities of the company, this is what we’re trying to achieve, and also alignment as well. So certainly in a big organisation, making sure people are collaborating, getting them all pulling together can be a real challenge. And goals can be one of the ways you can do that. And they can definitely foster the sense of accountability as well. So you know, we’ve set this target, how are we doing? Are we checking in? Are we doing a good job of that? Let’s hold yourself true to that.
But what I’ve also observed is that when they’re incorrectly set, goals can be really demotivating. So if teams or leaders and organisations are consistently setting goals, which are over ambitious or unrealistic, then that can actually be really demotivating wher people consistently fail to hit them. So you need to bear that in mind. They can create short term thinking, going back to that example of the salespeople, it’s really that sort of almost symptomatic of that short term goal setting, are you then ignoring the long term macro picture or you’re ignoring other things that you should really be paying attention to, because everybody’s myopically focused on this goal?
Might even encourage negative behaviours. Okay, so if people feel that to achieve something any costs, are they going to game the system? Are you going to cheat the system? And that’s maybe the most extreme example? Or are they more likely just going to ignore other things that they probably should be paying attention to, but they won’t, because they’re focused on the goal. And it can just be like a hamster wheel, you know, you just feel you’re on this treadmill, you’re constantly moving from one, one goal to the next, where does it stop, and it just you get exhausted. So I’m not not being too down on goals, because I use them all the time. But I just think you have to have a little bit of perspective about them. And I want to just share with you an extreme but cautionary tale in terms of goal setting. And it comes from the late 1960s and 70s, when the car market in America was changing quite rapidly that point. And in response to that the CEO of Ford set the company a very ambitious goal. He said, we’re going to build a new car and it’s going to weigh under 2000 pounds, and it’s going to cost under $2,000. And it’s gonna be available in the market by 1970. And I think I think it was released was a Ford Pinto, I think it got pushed into production in 1971. I think at that time, it was the fastest car had ever been taken from conception into production, you know, it’s a good looking car as well. There’s one problem, this thing basically exploded into impact every time somebody ran into the back of it, okay. Dozens of people were killed in fires as a result of this car going into production. And the Ford Motor Company has spent millions of dollars in damages and settle lawsuits.
Now, this is a very, very extreme example of some other examples. And that goal is going well paper that look at different industries, like banking, where a goal was set and the company understood that this had to be achieved at all costs. But that clearly led to some very, very negative outcomes, and very, very negative consequences as a result of this. Just a cautionary tale.
Now, it wasn’t just about the goal in this set. That was part of, but there was something else that led to this as well. And that was the culture of the organisation at the time. They’ve been given this goal when said that they had to achieve this at all costs. But there was also a culture that made that people didn’t want to push back. People wouldn’t disagree with management, they don’t want to raise concerns or feel like they were sort of like not not on the on the bus with everybody else. And this was really like symptomatic of the culture in the organisation at that time. And it speaks to the importance in the cultures that we have the impact that has on the organisation, but ultimately, outcomes for customers. So that was obviously a fairly extreme example of a pretty serious customer outcomes. But in their prime to perform they looked at how the culture of an organisation as measured by how motivated the staff were, and how they ultimately ended up related to customer satisfaction. What you can see is across different industries, a clear correlation between happier more motivated workforce, healthier culture, and happier, more satisfied customers and better outcomes for customers.
And this probably isn’t like a huge surprise to many of us, I think we all intuitively know that, you know, you’ve got a happier company, you’re going to deliver a better result for your customers as well. But it’s interesting to see, I think it speaks to just the importance on investing in the culture of your organisation, in terms of the benefit that it can bring. No, this is something that Saielle is going to talk about alot tomorrow and I’m sure she’ll do a much better job than I will. But I just want to touch on some of the things here that as a relates to motivation.
And I think culture’s actually quite a complicated thing. We struggle with it. Here’s all these different definitions of culture. And when we think about cultures, within communities and societies, is quite a nuanced thing. It’s made up of so many different factors, right? Everything from the language that we use different traditions, rituals, tools, and objects, art, food and drink, values, the stories and knowledge that we tell each other, we pass on. All of these things build this rich tapestry of what we call culture. But then when we talk about culture, in terms of our companies and organisations, I think we’ve quite often simplify and quite often dumb it down a little bit. Now, hopefully, most people here would agree that culture isn’t your pool tables, and your beer fridges and your ping pong, right? Hopefully, we’ve all kind of gone gone past that stage, right? But what we do often fall into the trap of saying, Well, what is it then? Oh, it’s the values. Culture is values, right? Okay, cool. And then we see these things here, right, these value walls.
And one of the things really interesting is that you see the same words coming up again and again, like honesty, trustworthiness, integrity, respect, quality, collaboration. Now, something wrong with that stuff, okay? But this is nothing exciting about it, either. You know, there’s, there’s nothing like particularly unique or interesting about this, okay? These are just the basic table stakes of being a decent human being, it’s nothing to be proud of. If you have to remind your staff to not be a dick when you come into the office every day, you’ve got bigger problems, right? That’s not culture. Okay, these are permission to play. Because there’s no choice there. You can say we’re trustworthy, as opposed to what be untrustworthy, good for you.
So not being too down on this stuff, but let’s just not pretend this is actually culture. So what is culture? A great, very old kind of a definition with you and Kennedy 1982 corporate culture, it’s just the way we do things around here. And I think that’s interesting, because I think it widens your horizons. And then you then have to ask yourself, Okay, well, do we do things or round here? And that can be really difficult to answer, especially as a co founder, because so much of the way things are done around here is subconsciously as a result of who you are and who those other early employees So it can be really difficult to understand what is and articulate what it is.
And I think they’re really interesting aspects of culture of when use an organisation have multiple paths that you can choose. And those paths may be equally valid. So it’s not like trustworthy and untrustworthy, there’s an obvious right and wrong there, nobody’s gonna be a we are an untrustworthy organisation, we have an organisation that doesn’t show respect or integrity. Nobody says that, right?
But what about situations where there are equally valid paths, and you choose to go one through one path consistently. But another organisation would choose to consistently go down another path? That’s when you get to the real heart of what your culture is. So what I’m gonna do is, I’m just gonna give you a few questions, which you can take away, think about, maybe have a conversation when you get back to workplaces, and it might help you think about your own culture in a helpful way.
So just really like simple one, what type of company are you your product company, or sales company? Now, each one of these I’m going to like this bit by dichotomy, and clearly is no, there’s a spectrum. But we all sort of, I think, understand that there will be companies that are more to one side than the other one, FreeAgent, we were always a product company, right? The co founders came from that background of being designers, engineers, product, folks, we were always in that side. And you may see that that’s great, right? product companies are great. And we did a great product, you know, customers love, I’ve got a great NPS score all the rest of it. But we really struggled on the sales side, you know, we really struggled in the early days with that commercial aspects of the business.
But wasn’t just that, if you worked on the SEO side of the company, if you’ve worked in sales, if you worked in marketing, you’ve maybe felt like you weren’t as as important as the people that worked in the product, you maybe felt or that your voice wasn’t as low there wasn’t as listen to as people on the other side of the organisation. And that was definitely feedback that we got. And it’s something that we tried hard to readdress over the years. But it had to be a conscious effort, we had to understand that in the first place. So where do you sit in this?
What’s more important to you quality or speed, again, feels like a web of false dichotomy maybe but for us, you know, we’ve always focused on the quality, you know, when you get into that, it’s great, but things just took ages, sometimes we probably should have cut corners, we should have should have been happy with things being like 80-90% just got it out there. But other organisations would move fast and break things, they will just throw everything at the wall and see what sticks. But actually, you’re going to end up building a lot of like debt you know, you’re going to like equality is going to suffer, a customer is going to be unhappy as a result. Where do you stand here?
What’s the focus of the company: customer focused or growth focused? They’re not mutually completely exclusive here. But everybody says they’re customer focused. But in reality, what I’m talking about growth focused, right? We need to be honest about that. So where do you sit in the spectrum here? And the answers to these questions will form a strand of your DNA of your organisation? And that will define how decisions are made that will define how priorities are set, and even define the strategy of your company.
On that, what the topic of decisions there? How are decisions made? So do you relentlessly use data to make decisions? Or is it more about ideas and opinions? Clearly, there’s room for both, but you’re probably like, err towards one way or the other? Who is it that makes the decisions? Is is autonomous teams with with an agency and empowerment? Or is it more like top down control? Again, hopefully most of us here would agree that you will build a healthier organisation, build a healthier culture when you give autonomy to teams, you do empower teams, but it’s never that black and white, there are still a whole range of decisions that are going to be made by leadership or some things which are delegated. And some things which aren’t delegated. How do you do that your organisation because I’ve seen it work in very, very different ways. And it can have quite a profound impact. And there’s not necessarily a right or wrong.
How do people approach conflict in your organisation? Do they embrace conflict? Or do they prioritise harmony? And you might say, it’s great, we embrace conflict, everybody just goes, I will get our views out there. And we get to the heart of the problem, and we just get the best result. And then we move on. And you may think that’s great. But actually, is everybody comfortable in that environment? Or some people are going to feel it that’s actually quite hostile? Some people are going to feel that maybe that’s quite a toxic workplace to work.
On the another hand, you prioritise harmony? Do you really say no, no, we really want to create an environment of psychological safety. And that might be great. But I’ve definitely seen situations where it goes too far. And that means that people are just like too scared to maybe offend one another or disagree with one another or create any sort of conflict whatsoever. So harmony gets prioritised over the best possible outcome. And I’ve seen both of these situations. So where do you sit on this?
And again, the answers to these questions were from another strand of your DNA, which will define things like the structure of your organisation, how it’s managed, and just the general feeling of the place, just the general vibe.
So hopefully, you get the idea that this idea of creating a motivation of your business to the culture is quite a complicated thing. And it can be something that’s quite hard to understand as well because you’re just very, very close to it. It all comes together very well, but that culture wheel where we have this pyramid of like, you know, how do people behave? How does the company work? What’s important to the company hosts that treat? And yeah, what is the workplace like, but that’s just the very, very, very, very top of that pyramid.
It’s quite nuanced thing, it could be something that really can be, I think one of the most enduring elements of your, of your organisation motivation. Okay, so that was pretty all I want to talk about just a couple of closing thoughts for me, when you think about your own personal motivation. Remember that it’s really important that you’re constantly reflecting on that thinking about where you are on that journey, because it is going to change if you’re with a company for 5/10/15/20 years, whatever is your personal motivation, you’re going to change as a as an individual. And your motivation will change along with that, it’s important that you keep checking in there and having that conversation with any cofounders that you have to understand where they are as well, just to make sure you’re really well aligned. And in terms of the business, we talked to how we can use setting a mission, how we can use goals, the enduring importance of culture. But the one thing I think you always have to think about as a business leader and as a founder is how are you teaching people to yearn for that vast and endless sea? Okay, thank you very much.
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Thank you, Roan. Great way start, we are going to take questions, we have magically COVID compliant booms here, but they’re quite heavy. So make the question short. Let’s start here.
First of all, thanks for a great talk. It was very interesting. And you’ve set a high bar for the rest of the speakers. Filling challenge. You were talking about culture. And I wondered how much you felt you needed to articulate culture? In the sense there is a sort of a spectrum? On the one hand, if we have to tell people this is what we think maybe it’s not obvious. So so how far do you feel you need to have it articulated and set down as a set of rules? What a company’s culture is and how far, how much do you feel it’s just something that we get it?
I think, in terms of writing it down, I think is very difficult, because it’s the sum of all of these things, how could you write that down? I think we did some of that excellent value setting exercise early on. But we just ended up coming out with a lot of the stuff that we have there, we do have some culture statements that are that we have articulated, they’re their three little statements that we use, but I wouldn’t pretend that just by reading those, you would understand every single aspect of our culture at all, I don’t think that’s the case it’d be, I think it’d be naive and over simplistic to think that.
What I think is important is that you talk about the when you just start to understand it yourself. One of the things that was really difficult, it would say because so much of the culture comes from your own personality is a set of cofounders is that please be aware of your own biases, and be aware of this thing comes from, there’s a couple of exercises I think you can do. I think the people who understand your culture best are either people that have just started in your organisation or just left, okay, when you’re in the middle of it, it can be really hard, because it’s like, you know, you’re too connected and even as an employee, but when somebody joins your organisation, they get this way, okay, this is different, they immediately see the differences. And when somebody leaves, then you get that chance to sort of reflect on things. And so they’re actually the people that is quite useful to speak to, to understand what your culture is, and get their perspective. It’s why I think exit interviews are so important. I think there’s also another thing as well, one exercise that we did, when we went through this process, and it was comes from the book, The Advantage by Patrick Lencioni, which we use quite a lot was like, if you almost think about who’s your model employee in the business, if there was one person in your company today think that that person, you just you just epitomise what we want? And then say, well, what is it about that person? What you’ll probably find is that that’s the elements of culture, that you believe in your organisation. So I think you can write it down. I think it’s very, very difficult. I think it becomes implicit and your systems and your processes and all these things becomes there. But I do think is important to talk about it just be aware of is going to be perceived by other people.
Hiya, thank you really enjoyed your talk, and I’m a customer so we could have some feature request chats a bit. But my questions about us and then and when you’re scaling the organisation, did you realise that there was a point in which you had become them in terms of the Us and Them equation with respect to the rest of the world? And how did if you did how did that affect your motivation? When you realised like are we the baddies now?
What as cofounders? I think you always feel like it, then I think you do that with us. I mean, even amongst, you know, the leadership team, free agent, there was always a sense of way, you know, co founders and non co founders. So something I personally always felt felt quite uncomfortable about, but it’s just like dynamic that you can’t really change, like when you do own a lot of the business, and there’s always the possibility that there’s going to be an exit, that’s going to be a decision that the founders make, right. And so there are certain things which always come under that sort of a remit. And so there is that difference there. I don’t necessarily think that means you’re automatically the baddy. I hope not. Sometimes I think it’s quite the opposite. I think, you know, yeah, there’s almost a mythical heroes stage, you know, as a sense of identity and staus, I think you’ve got to be wary of that you want, you don’t abuse it, you don’t let it go to your head. So I gotta say, one of the things I really liked was that over time, it felt like I was less important as an individual. And I quite liked that. I must admit, I found that quite a liberating thing.
Yeah, thanks. I love the slide you put together on the personal growth, business needs a really resonated strongly with I was chatting with a friend last week. And he was saying, you know, for last two years, his business has sort of been flatlining and sort of stagnant and I think he’s kind of avoiding the introspection and inner work that he kind of needs to do to sort of take the business to the next level. And I was curious from your journey, what you’ve done what you did over the years to like, sort of force yourself into having those hard questions with yourself interrogating times where there’s that tension between your personal growth and the business demands upon you and sort of, if you can share the ways in which you worked out how to break through some of those logjams?
Yeah, so I mean, obviously, you try it as a co founder, but you might not be in complete control, but how successful your businesses, right, you got to say, I’m just gonna make my business more successful tomorrow, because if it was, then we don’t do that, right. So you’re not always able to just to do that sometimes are going to be periods where the business feels like it’s coasting along. And likewise, there gonna be times when you feel massively challenged, and stressed. So I don’t think you don’t always have complete control over that. But what I do think you do is you need to think about where you get motivation from other sources. And that’s where I was really trying to get to is that there’s lots of places and ways that we get motivation from the people that we work around to the, to the organisation. And so for me, there was times when, you know, I felt like I was, you know, just like, you know, things were ticking along quite nicely, and it was fine. But that’s when I feel really solid, like started to change, my mindset is to be like, Okay, how can I make this a better workplace? Okay, maybe you’re like, you know, the, in terms of the skills or the, or the financial growth of the business, it’s not exporting right now, or things are really some I’m not here to learn anything completely radical. But how can I make this a better workplace that people are happier, more motivated than just like, we tend to be there. So I think you just have to, like, look at those different ways in which you can gain motivation. And hopefully, you know, do obviously work as hard as you can, and hope the business is going to take off again, but it’s a difficult one. And that’s why I say, you know, sometimes people will grow businesses, you know, that’s just a reality, that happens to co founders as well.
So one of the things I thought was interesting about Roan when I was looking at speakers, and we were talking is that I think the biggest company that you’d worked for with in before a FreeAgent was like a massive for freelancers. Quite often, founders kind of have this kind of comfort level of oh, I just like startups or they get to 10 or 50 people and bog off; You keep kind of embracing the larger sort of organisation. Do you think there’s a kind of a comfort zone for you? Where do you where do you feel most comfortable? Um, what were the things that changed for you personally, as an entrepreneur, as you went through those stages, because startups are very, very different. And you’ve been basically learning since the start?
Yeah, I think so, you know, we used to always joke right when we started out, we had that conversation early on, you know, what did we want to go but, and we always said, We don’t want to go in and run a company of 50 people who have no God, there’s no way you’re gonna have your company and then we go into like, 40 people and say, Yeah, okay, fine. We don’t want I’m gonna come with 100 people we’re definitely gonna do and if we go to ninety people Yeah, we don’t All right, a couple of every time it scaled and scaled and scaled and ambition went up with it. Now, I honest, I think the Ed the CEO, I don’t think he did enjoy running a company to be with us, I think he was kind of honest about.
For me, it was a bonus personal growth thing. And it was really just about what’s the new challenge. So for me today, if I was to quit FreeAgent, I wouldn’t want to go back to creating another star, because I’ve kind of done that, right. And I know there was some great things about it, there’s a lot of crappy things about it as well, that wouldn’t really motivate me because it wouldn’t be something new. But actually running a company, whatever it is, today, that is something that is novel to me. And it takes a whole sort of new set of skills and abilities. And I know personally, I’ve had to mature so much as the company has grown, because you just can’t act and behave in the same way. As when there’s three of you building this little thing as when you’re running a company, it’s so different. And I’ve had to really, really mature as an individual over that over that period of time. And that’s something that’s been really good for me, you know, not just professionally, but in my personal life as well. And so, that is one of the things that definitely sort of keeps me motivated. But you know, is different. And it’s not, it’s not a journey that everybody wants to go on for sure.
Do you have in your mind this ultimate ‘Hey, that’s where I’m going to be most comfortable’ Or do you? I mean, sounds like you constantly want to do something different and a bigger challenge. You don’t have that?
This is what I’m talking about with the goals? And I’m not sure I do, I do have a bit of a different reason. I think the acquisition is really part of it, because it’s very much seen as the endpoint. If you get there and you’re lucky enough to achieve that, then what do you do next? What do you do afterwards? Right. And I really strongly believe at some point, you have to fall in love with the journey, not the destination.
So at what point can you just enjoy running a company for what it is? You know, and I think that, you know, so many like co founders or founders, they’re very, very goal orientated people, they’re very ambitious people. But what has there’s, there’s a downside to that. And when you achieve those goals, you just kind of like, okay, I don’t know what I’m gonna do next that kind of gold medal syndrome, right. And so, I do wonder, people quite often, you know, talk disparaging way, but it’s always just a lifestyle business, you know, or it’s just a lifestyle business? Well, what’s wrong with that? What’s wrong with running a business, that’s a great place to work, people are happy there, you’re profitable, you make a bunch of money, you make happy customers, I actually think there’s something really, really special about that, you know, so for me, I’m trying to get to a place in my life where I’m no longer always fixated on the next goal in the next goal, because I realise you’re, you’re just chasing a mirage at some point. Not to say that you shouldn’t have goals, I think you can. But I think there comes a point where you do have to think about, like, Where does this end and is it a hamster wheel?
One more question. Here we go.
I’m just gonna say When did you realise the first time you made an offer to sell out that you didn’t want to sell out? Was it quite early on in the process? Or was it right as you’re about to sign? He’s not actually I don’t want to go through with this. And will your co founders along with you straightaway as well.
So no, there weren’t. So it was very, so it wasn’t related to my own parents. I don’t think it was, I don’t think it was genuine just wouldn’t have been the right thing for the company at all. Like the business would not have existed today. If we had done that, that deal. And I thought that was to me, that felt pretty obvious. And what I actually said to CEO at the time was, I said, you stand up in front of the company and when your morning announces, how are you going to feel your heart of hearts?
Are you going to feel like you really really cause, we all know where you’re going to say, Oh, amazing journey, a great opportunity. So excited for the future, blah, blah, blah. Are you gonna feel okay? And so just it wasn’t right. It didn’t feel right. It wouldn’t have been the right thing. But then actually, when we did sell the company, it did feel what the right thing I knew in the heart of hearts, it was the right thing for the business at that point. So I knew pretty early on it wasn’t a thing, but then it was obviously it was conflicted, like not the right thing, because that load of cash, you know, clearly that’s a dilemma you’re gonna have, but I’m glad that we did go down that route.
Roan, thank you very, very much indeed.
CEO & Co-Founder, FreeAgent
Roan is CEO & co-founder of FreeAgent, a SaaS accounting company based in Edinburgh. He and his co-founders started FreeAgent as a weekend side project before building it to become a company with 130,000 SMB customers which was acquired by RBS in 2018.
Prior to FreeAgent, Roan was a physicist before working in a four person web agency. He believes in building products to solve real customer problems that are a joy to use.
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