The founder of a company acquired by WeWork described the lessons from a whirlwind process of joining Adam Neumann’s startup in a Twitter thread on Wednesday.
Dave Fano worked at WeWork for nearly four years after his architecture and planning company, CASE, was acquired in 2015, according to his LinkedIn profile. But it almost didn’t happen.
“We spent 7 years building an amazing culture of trust and transparency, and in a span of 24 hours, almost lost it all,” Fano wrote. “Caught up in trying to get the deal done, we lost sight of how this process would make everyone feel.”
Fano said CASE told its workers of the WeWork acquisition and asked them to return signed documents within 24 hours. The entire process took less than a month from when a verbal agreement was reached to when the deal officially closed.
The transaction put many of the firm’s employees in a tailspin, Fano said. CASE was given less than two weeks after the letter of intent was signed to officially close the deal by informing employees and getting the workers to review WeWork’s employment agreement.
According to data from Forbes, most mergers and acquisitions take about four to six months, but can also encompass a period of several years. Even at that rate, many employees choose to leave companies after mergers and acquisitions. Data from the MIT Sloan Management School found that within the first year of a company’s acquisition 33% of workers leave the company as compared to the standard rate of 12%.
“That was one of the worst business decisions I’ve been a part of in all my career,” Fano, who’s now the CEO of career planning company Teal, said in his Twitter thread.
Eventually, Fano said, he asked for more time from CEO Adam Neumann, who agreed to give the team several extra weeks.
Despite the extra time, he said the company still lost many employees as a result of the acquisition. But he does not regret his decision to join WeWork.
Fano said the situation opened his eyes to the importance of company values. By asking employees to make a 24-hour decision, he felt he violated a culture of trust and dependency.
“As intense as that moment was, I would not trade it for the following 4 years at WeWork,” he wrote. “Everyone experienced incredible career growth. WeWork enabled people to explore new career paths, take on new responsibilities, and build relationships that will stay with them forever.”
After only six weeks of working in his company’s newly purchased office space, Isaac Rudansky, founder and CEO of AdVenture Media Group, sent his employees home to avoid the spread of COVID-19. He lost 35% of his clients in the first three weeks of the pandemic.“I’m actually an optimistic person, but this was a really dark period,” he said. “Oftentimes, when you’re dealing with feelings of depression and stress, it’s impossible to look at a longer horizon.”
So rather than look forward, Rudansky looked back at the past five years. Even through the peaks and valleys, he saw that his life and career had trended in a positive direction. That perspective gave him the confidence to move forward.
As Eve Lewis Prieto, the director of meditation and a mindfulness teacher at Headspace, said, “one of the best things about mindfulness is that it can be applied to every area of your life. Mindfulness is the ability to be fully engaged and present with a soft and open mind, also known as paying attention on purpose.”
As we pass the one-year anniversary of the country entering lockdown, founders shared with Inc. some of the practices that strengthen their mental health and help them stay mindful.
1. Identify what you’re feeling
When she looked at the options to confront her anxiety and burnout as a software engineer, Meha Agrawal, CEO and founder of Silk and Sonder, felt intimidated by therapy and was bored by meditation. Instead, she found that writing was the outlet she needed.
“There are a ton of benefits of bringing pen to paper,” she said. “It alleviates anxiety and stress, and it helps increase IQ and memory. It’s proven to heal trauma.” Agrawal created a journaling routine back in 2017, and soon after, she began developing her subscription-based journal companyto help customers emulate her experience with journaling.
Aaron Sternlicht, a therapist and cofounder of New York City-based Family Addiction Specialist, endorses writing as a way of tracking your emotional mood throughout the day. This practice can help you understand which activities and times of day spark more anxiety, he said. Once you can identify the trigger moments, you can better prepare yourself to respond.
2. Lean on other people
Angela Ficken, a psychotherapist based in Boston, notes that maintaining personal relationships is a constant challenge in a founder’s life. The pandemic has only worsened this, she said, spurring more mental health challenges for founders. In recognizing the importance of community, Agrawal created the Sonder club, an online community where Silk and Sonder users can connect on their wellness journey.
Talking with people can be the best outlet for maintaining your mental well-being, Rudansky said: “It allows a person to express sympathy and empathy for what you’re going through.”
A couple of months ago, he said, one of his executives reached out to him to express that he felt overwhelmed at work. Rather than showing weakness, it showed strength and character, Rudansky said. The two ended up on an hourlong phone call together where they both opened up about their feelings and current struggles.
3. Make time for yourself – and start small
Last month, Tori Farley, cofounder of Better Than Belts, a unisex suspender company, joined a book club and read “The Gifts of Imperfection” by Brené Brown, which teaches readers how to reorient their mindsets and explores the psychology of authentic living. Farley was hesitant about reading a “quasi-self-help book,” but “When I read it, it just clicked,” she said. “If I want to spend two hours in the morning doing watercolor painting because that is going to make me feel happy for the rest of the day, then that’s what I should do, and I don’t have to start my day by checking my email.”
Even if it’s just a short moment in time, doing something for yourself can help you get out of a workday slump, Farley said. And Ficken adds that the all-or-nothing mentality can be extremely harmful to mental health. If you can’t get in your full workout that day, she said, don’t give up on physical activity. Instead, walk around the perimeter of your house for a little while or even take a few minutes to walk to your kitchen to get some cold water.
Headspace encourages users to start with just three to five minutes a day, Prieto said. “Some days the mind is going to feel really busy and on other days much quieter, so you are not doing anything wrong if you find that it’s taking longer for the mind to settle,” she said. The goal is not to empty the mind, but to be at ease with where you are.
After calls for racial justice swept the nation last summer, Insider wanted to know if anything has changed for Black founders looking to find their footing in the tech industry.
So, we spoke to them.
On Thursday, February 25, Insider’s reporter Dominic-Madori Davis chatted with Realtime CEO and cofounder Vernon Coleman, Yac cofounder Jordan Walker, and Cashmere cofounder Urenna Okonkwo about their journeys in tech and the future they wish to see in the industry. Okonkwo, who is based in the United Kingdom, also gave her perspective as to what it’s like raising money as a Black entrepreneur across the pond.
Together, the trio shared advice for aspiring founders on how to navigate the industry, as well as lessons they wish they knew when they began their entrepreneurial journeys.
“When I look back at my journey of Peloton and my colleagues, the ones who really succeeded were the ones who put in all the effort to learn,” Stanton said. He added that asking questions such as “How do I do my job today, because the way I did it yesterday no longer applies?” is key to getting ahead.
Founded in 2012 in New York City, Peloton launched with a Kickstarter campaign for its at home stationary bikes that stream virtual spin classes on monitors. The product tracks workout metrics that can easily be shared on social media. Peloton gained traction quickly from a loyal customer base and went public in 2019. The fast growth required the company to reinvent itself repeatedly.
“At one point, I joked that every year I felt like I was working at a totally different company,” Stanton said. “Now it’s every six months.”
Here are three tips for how to manage rapid change at a fast-growing company that Stanton said any flourishing startup should pay attention to.
1. Don’t pay for focus groups if you don’t have to
In the early days of the company, Stanton didn’t want to pay a consulting firm to weigh in on decisions such as whether to make the bike’s color black or white. The time it would take alone could hold the company back, which is not conducive to fast growth. Instead, he moved quickly by simply emailing about 30 peers and asking for feedback. In this case, the response was almost unanimous to choose black.
While you can get bogged down over every little detail before the product launches, Stanton says to “move quickly” and learn as you go.
2. Look to your fans for business ideas
The first Peloton Facebook group was run entirely by customers, who even organized meetups at Peloton stores to create their own community. Sensing potential, Peloton offered to take the Facebook group off the moderator’s hands and hired an in-house social media team to run the account. Soon, the company made sure Peloton stores were equipped with events and meet-and-greets with popular instructors to welcome the riders.
“It turned into a very official thing, but it was all leaning into the community that was already self-organizing,” Stanton said. Today, the Facebook group has 389,000 members.
Before Peloton launched, Stanton was considering having user-generated content for classes, meaning anyone could film themself instructing a class and share it with other Peloton users. At the time, Stanton wasn’t sure what made the company “special” yet, whether that was the software, the bike itself, or the video content.
“We then realized that it’s the whole package and the experience,” he said. Rather than going the user-generated content route, the company changed gears and focused on in-house production with great music and professional instructor-led classes. The decision was key to creating the “true essence of Peloton,” Stanton said.
2020 was a record year for initial public offerings in the US, with 442 logged as of December 14. Yet only five of those were companies founded and led by women, according to research by Business Insider and information provided by Nasdaq.
Historically, only 20 women have ever founded and led a company through to an IPO.
Some companies have gone public with female CEOs who were not their founders, but that number is small compared to the majority (at this writing, only nine companies have fit that description this year).
The jarring discrepancy was pointed out by Julie Wainwright, the founder of the luxury consignment shop The Real Real. In May 2019, Wainwright became the 15th woman to found and take a company public.
To achieve gender equality, the fastest way forward is to close the entrepreneurial gap and support more women founding Fortune 500s. That’s because women aren’t reaching powerful positions often enough when they go the traditional corporate route.
Also, we need more women to try and become insanely rich.
Money equals power, and the only way to generate enough wealth to become one of the world’s most powerful people is to start a company.
Corporate America is broken for women. They need to blow it up and rebuild it if they want more leadership positions.
We know women fall behind men from the very first promotion.
A 2019 Lean In study called this the “broken rung” in the corporate ladder. The workforce won’t improve for women anytime soon.
The best way to fix this isn’t to blame or exclude men, who are in charge and can be powerful allies. But we also can’t expect them to change all their unconscious biases, which can be blind spots.
Instead, corporate America needs to be blown up and rebuilt, with diversity as a pillar from inception, led by more women and BIPOC founders.
If women want to become as powerful as men, they need to create rivaling fortunes. The only way to do that is to start the next Fortune 500s.
Warren Buffett. Jeff Bezos. Bill Gates. The richest people in the world all started their own companies – or inherited their fortunes from someone who did.
That’s because founders tend to own large chunks of their companies when they exit, far larger portions than employees working for them ever could.
If women want to become as powerful as men, they need to start the next Fortune 500s and create rivaling fortunes.
But in the 204-year history of the New York Stock Exchange and Nasdaq – where hundreds of companies go public each year – only 20 have been founded and led by women. Eighteen of those IPOs were in just the past seven years.
When women do try to start companies, numerous pitfalls prevent them from scaling their ventures.
For women of color, the investment gap is even wider.
DigitalUndivided is a nonprofit social startup focused on programs and training that foster economic growth in Black and Latinx communities. In 2016 it launched ProjectDiane, a biennial research study that tracks investment in companies founded by Black and Latinx women. Its latest report, released this month, showed some progress for these communities. But not enough.
Total funds raised by Black and Latinx women in 2019 grew to $3.1 billion, ProjectDiane data shows. The number of Black women founders reported to hit the “million-dollar club” in investment rose to 93, compared to 34 in 2018, while 90 Latinx women hit that milestone.
But the report points out glaring gaps. The median seed funding for startups overall is $2.1 million, but for Black and Latinx women founders the median is $475,000. For those raising less than $1 million, the median seed funding drops to $125,000 for Black women and $200,000 for Latinx women.
Since 2018, Black and Latinx women have received only .64% of VC funding.
Since 2018, Black and Latinx women have received only .64% of VC funding.
“Our mission is to create a world where all women own their work, where women have wealth,” Lauren Maillian, the CEO of Digital Undivided, said. “It is only through our jobs, our careers, and our work, that is the path to wealth creation. Not just for women, for all people, but women of color get left behind that.”
“We upskill and re-skill and equip women of color to compete in these spaces and places that are not designed for them to succeed,” Maillian said.
When female founders do get funded, expectations are different
Rent the Runway CEO Jennifer Hyman is one of the most successful female founders. She has been outspoken about the different challenges men and women founders face, from investors and the press.
“I haven’t been given the permission or privilege to lose a billion every quarter,” Hyman said on CNBC, shortly after profitless Uber went public and cash-burning WeWork filed its now rescinded S-1.
Julie Wainwright, the founder and CEO of The Real Real, said she sees three main barriers to entry for women in entrepreneurship. One of them is the expectations women set for themselves.
Women aren’t thinking about starting businesses or planning for outsized success early enough. And when they do, they aren’t dreaming big enough. One survey of 57 women CEOs found that only 12% of them planned to be CEO someday. The rest had to be told it was something they should consider.
There aren’t enough women in venture capital with big funds behind them who can lead large investments and write follow-on checks. “When you raise capital, if you’re running something big, it will require more money, and that person who initially funded you will go back to their fund to lead the next round,” Wainwright says. “And they have to have enough capacity to keep funding you so you’re not left in the cold. . . . You need people with billions behind you.”
There’s no “PayPal mafia” for women who can support female founders, rally behind them, and push through their success. The PayPal mafia refers to the early PayPal employees, including Max Levchin, Joe Lonsdale, and Peter Thiel, who’ve all gone on to be successful entrepreneurs, aided partly by their friendship during PayPal’s startup days. “Those guys have a tremendous network where they’re supporting each other,” Wainwright says. “It’s not a formal thing. But when people come up with ideas, they push them to think bigger. They’ve got the support of the mob once they go. And the mob isn’t there to make sure they’re successful. So because there are not enough women in startups, there are not enough mobs.”
Despite the barriers, it’s time for more women to try. To stop thinking What if it fails? and instead think What if it works?
For an extra nudge, Wainwright knows a widely kept secret: Most successful startup founders aren’t anything special. The difference is they tried, and you didn’t.
“To be honest, half the people that I meet are not a Bill Gates, Steve Jobs, or even an Elon Musk,” she said.
“What they are is they’re determined. They have a goal and they have a big vision and they don’t give up, and they did it. They didn’t think about everything that would possibly go wrong. They thought, I am going to do this, I can make this happen.“
Women starting businesses is great for the economy
Gender equality in business isn’t only a moral imperative. When it’s achieved, it improves a company’s bottom line and boosts the global economy.
Companies also perform better when more women are in power. A Bank of America paper found that S&P 500 companies with more diverse boards and a higher percentage of women in leadership positions delivered higher returns on equity.
Fortune 1000 companies with female CEOs have been found to perform three times as well as those led by men.
“Understanding the link between women’s empowerment and the wealth and health of societies is crucial for humanity,” Melinda Gates wrote in “The Moment of Lift.”
“If you want to lift up humanity, empower women, she said. “It is the most comprehensive, pervasive, high-leverage investment you can make in human beings.”