Employees, customers, investors — in that order
Before they had an idea for their company, founding partners Sachin Kamdar and Andrew Montalenti knew exactly what kind of company they wanted to run: one that puts employees first. Their hypothesis was simple: building a company for people who love the work they do, and helping them do their best work, will produce greater value for clients and investors.
A value hierarchy that places employees above both customers and investors isn’t typical for an early stage technology company — or any company, for that matter. The unconventional strategy has helped Parse.ly achieve profitability and raise $6.8 million in Series B funding. Sachin and Andrew flipped stale structures upside down to build a company that focuses on what’s most human about work — how people think, what they believe, and how they behave in different environments. For Sachin, this was the most intentional and most important business decision he ever made.
Getting investors on board with an employee-first hierarchy
Despite popular consensus that successful startups lead by being boldly and unapologetically different, divergent business models are not always an easy sell to investors.
“Investors really like pattern matching. That’s kind of the way they go about their playbook. I see these trends, I see companies matching these trends. Therefore, I am going to invest in these groups of companies,” he says.
And all too often, the companies with the highest valuations are not those known for investing in employees. Choosing to put employees first can be perceived as a risk, but as Sachin puts it, it’s the job of Parse.ly’s leaders to translate that risk into something valuable.
“If you treat your employees well, that’s going to have a cascading effect on your customers. And your customers are going to love the things you’re building, and love interfacing with employees. And that is going to impact your revenue.”
It’s not where you work, it’s how you work
Understanding that different types of work require unique environments, Parse.ly empowers many of its employees to design their own space through a remote work structure.
“It’s a fool’s errand to try to generalize work for the entire organization,” Sachin notes.
The remote policy simultaneously allows employees to balance passion for their work with passions outside of Parse.ly, whether it’s parenting or other personal projects.
“People are shifting hours a little bit so that their work isn’t determining their lives,” Sachin says, adding that instead of clocking a certain number of hours, employees focus on the value and quality of their output.
For engineers, working outside of a typical open office setting offers an opportunity to get in the zone and reduce interruptions. Working remotely doesn’t always mean working from home — Parse.ly subsidizes co-working space for employees who need to escape their homes to be more productive.
The “distributed team” structure works well for engineers, and it lets Parse.ly recruit top talent across the globe. But not all workers thrive in the same environment. Parse.ly’s sales team, for instance, needs a more centralized setting that encourages healthy competition and collaboration.
Letting the foundation serve as guardrails in times of growth and change
Parse.ly is no stranger to the changes most startups experience, but a thoughtful approach to infrastructure and policies helps the company maintain a consistent culture during times of rapid growth.
“When Andrew and I started the company, it was really easy to connect with what we cared about individually in relation to how we were building it,” Sachin says. “Because we just knew it.”
After adding 50 more people, Parse.ly had to balance its company goals with individual employees’ needs and values. Finding the right balance is top of mind when the group experiments with different policies or team changes.
Take the time an employee asked whether the company would ever consider an unlimited vacation policy. When posed to the larger group, half of employees were in favor and the other half opposed the idea. A quick gut check of those founding principles made it clear to Sachin: unlimited vacation was actually counterintuitive to the company’s culture. Rather than protecting time off, it could create unnecessary pressure to work more, reducing work quality.
Being “human” doesn’t mean never letting anyone go
An employee-first methodology often lends valuable advice in how to hire smart, but what isn’t as readily discussed is how to let someone go. The truth, as Sachin puts it, is that acting as a human company doesn’t mean keeping every employee around forever. It means being overtly thoughtful about the people you’re bringing in, and committing to an ongoing evaluation of how employees connect with the work and the company culture.
When an employee isn’t meeting expectations, it’s the company’s responsibility to clarify those expectations and develop a plan for helping the employee improve. Performance Improvement Plans have a bad reputation at some companies, but at Parse.ly, PIPs aren’t a death sentence. “It’s not a plan to get you out, it’s a plan to keep you here,” Sachin said. “We’ve had people come out of the plan and be our highest performing employees ever. And we’ve had people come out of the plan and it didn’t work out.”
The key is to clearly define tangible objectives that make sense for the individual employee. For some roles — for example, sales positions — the goals may be quantitative, but other performance issues may require a more nuanced approach.
Endings are equally as significant as beginnings, and the entire company benefits from transparency around the performance improvement process. Communicating what happened and why it didn’t work out helps other employees get over insecurity about their own performance and how their work is perceived.
The bottom line
“Running a human company is unique and different than traditional startups [or] traditional companies in general,” Sachin says. “Doing things differently, though it might have a little bit of risk, has some upsides too.”
Unlike many tech companies in Silicon Valley or New York, “we’ve never had a tough time recruiting engineers,” Sachin says. When top employees produce top results, those upsides are clear to clients and investors.