Sam Corcos, Levels (Part 2): Lessons Imbedded in the Scar Tissue of Startups

In this episode of Culture Factor, podcast host Holly Shannon continues a conversation with Levels CEO Sam Corcos. Sam shares lessons he learned from previous startups, how to build and scale a powerful team, and the importance of onboarding new employees so that they are set up for success and not a drain on existing resources.

Learn from failure

Just because your startup doesn’t pan out doesn’t mean you failed, as long as you learned something from it.

It’s definitely tough getting to a point where you convinced all of these people to join you in a major project they’ve really put in a meaningful percentage of their life into attempting to solve a particular problem, and knowing that it’s not going to succeed is really emotionally painful. It’s an interesting thing that so many people that I talk to, who their companies did not succeed, they view themselves as failures. I certainly would consider myself in different points in my life in that camp of, “I put all this work, I put years into this project, and it didn’t go anywhere.” But the reality is that most people see those things if you can show that you learned from them, which almost everybody does, it really helps in the long term. I’ve written, just honestly for my own sake, a postmortem on each of the companies on what I did wrong, what we could have done differently, what the major mistakes were.

Fundraise when you have momentum

One of Sam’s biggest learnings came at his early startup Sightline Maps, when they bootstrapped for too long.

One of the biggest mistakes we made at Sightline Maps, because we didn’t really know anything about fundraising, we bootstrapped the whole thing until a couple years in and then we started raising money and we planned our fundraising around when we would run out of money. That seems perfectly logical when you’re a first-time founder, because why would you want more money when you don’t need money? But it turns out, if you raise money when you need it, nobody wants to give it to you, and we ended up taking money on terms that were really quite painful. Had we thought about it differently, we would’ve raised money earlier when we had more momentum, and that would’ve been a much better approach.

Scale engineering responsibly

When you have the right tools in place, your engineering team can be more effective.

My philosophy on building software companies is that engineering is always the constraint. So anything you can do to free up engineering to moving the company forward to get your closer to product-market fit is really what you should be optimizing for. And at CarDash, we spent, in retrospect, way too much of our time building internal tools, and far too little time building products that our customers loved. Some of this is just because a lot of the tooling that we have now didn’t exist back then. We used Retool at Levels, which is an incredible tool that makes internal dashboards much easier to make. People on our ops team can make dashboards in an afternoon that usually would’ve taken several days of engineering time. So it frees up that resource to be used for other things. But it was really, I learned one of the lessons the hard way of making sure that we’re paying attention to what the end state is.

Build your team based on core competencies

Bring on new team members who understand your objectives and can help you iterate quickly.

We’re really focused on bringing on product-minded engineers, which are engineers who really want to dig deep into product and not just get the set of specs from the product team and implement those specs, but people who are really engaged in the process. So that’s another cultural aspect that we think about is the team composition. In different markets, core competencies are different. So if you’re building a company where your core competency is customer segmentation and marketing, the quality of the engineering team is less important than the quality of the marketing team. So really focusing on bringing on those people who understand those things and who can iterate very quickly and who can do growth marketing are very important. Other companies have a clinical competency. So just knowing what your competency is, I think, really helps to drive the team composition and the company culture.

Prioritize onboarding

At Levels, the team is very intentional and strategic about onboarding so that new hires find their feet early on.

One of our core values as a company is transparency and documentation. So usually when people start at Levels or even before they start, they have a lot of information on how our company operates. We share with them our team all-hands, we share our investor updates, we share our strategy documents, and it should give them a sense of how our team operates with each other and also, how we’re building things towards the future. One of our recent hires mentioned to me that he after two weeks of working at Levels, he feels like he knows more about our company and our team than he did about his previous company, and he was there for five years. Just the sheer volume of documentation. Because onboarding is such a priority for us in terms of culture, we try to ensure that people don’t feel pressured to have deliverables early on. You only get one chance to onboard, because then you have all these expectations and deliverables. So usually, the first week, we explicitly tell people that there are no deliverables. Your only job is to read this material, talk to the people on the team, learn as much as you can. And really, the first month is really focused on onboarding rather than trying to get them to start to contribute as quickly as possible.

Minimize growing pains

Sam described growing his team too quickly at CarDash, and what it taught him about onboarding resources for new hires.

At CarDash, we scaled the team very quickly. I think we went from five or six people to 40 within about four months. That was really painful…I think our engineering team went from two to eight during that time period, and our total output was basically static. So we increased the size of the team almost 5X, and the total output of the engineering team didn’t change at all. That was mostly because we had not done a very good job of creating processes around the stuff and making sure that people have the tools they need to be effective. So definitely one of the lessons you learn the hard way is that you really need to make sure people have the resources that they need to be successful.

Modern-day salons

Sam regularly hosts gatherings with bright minds, focused on diverse topics that he wants to learn more about.

I would host a dinner with usually eight to 10 founder friends of mine to talk about a pretty eclectic mix of different topics. It’s a lot lower overhead than a lot of people expect. It’s really about solving for the 80, 20 here. It’s not about having decoration or really expensive food or wine. People come to see other interesting people and talk about interesting topics. They range from the philosophical, like we did one on pragmatism and postmodernism, to a salon we did on the wine industry. Some are industry-specific, some are experiential. Did one on human connection and friendship, another one on purpose. So it’s been a really interesting way of learning from other people. To be honest, most of these are selfish. They tend to be topics that I personally don’t feel like I understand the answer. So my goal is to get other people who have thought about this who are smarter than me talking about it in my presence to help me come to a firmer resolution on it.

Learn from your customers

If you want to succeed, it’s important to put your message or product in front of other people, even if it means you might be criticized or rejected.

I do a lot of customer calls. I don’t do as many anymore, but there was a point in time, in fact, May of last year, so about a year ago, when I think I did somewhere on the order of five to 600 customer calls in the course of several months of just talking to people and learning from them and trying different messaging out to see what would work for them. There often isn’t a way of knowing how to frame something effectively. I would say not being coy about it, but I’m usually wrong when I have an assumption about something. The only way to test it is to put it in front of people and see if it lands. A lot of times it won’t, and that’s okay. You just have to keep going. I think if I had to give a shorter explanation, it would be it’s much more important to be comfortable with a rejection than it is to learn how to be a good speaker. And just keep practicing at it and just be comfortable having people shut you down and tell you no. And try a different message and try different channels, try different mediums. The only way to know if something’s actually working is to put it in front of them and see how they respond to it. And just being okay with the fact that most of the time, people aren’t going to like it.

Holly Shannon: Now back to our interview. I would like to go back to something that you brought up about what you view as failures in some of your past companies. And I know that there was a lot of highs and lows. I know that there was rejection. I think you referred to it as scar tissue. I feel like we never really talk about some of that stuff, and I think a lot of people who are in startups would probably get a lot of value in hearing the honest vantage point of that. Would you mind sharing?

Sam Corcos: Yeah, I mean, it’s definitely tough getting to a point where you convinced all of these people to join you in a major project they’ve really put in a meaningful percentage of their life into attempting to solve a particular problem, and knowing that it’s not going to succeed is really emotionally painful. It’s an interesting thing that so many people that I talk to, who their companies did not succeed, they view themselves as failures. I certainly would consider myself in different points in my life in that camp of, “I put all this work, I put years into this project, and it didn’t go anywhere.” But the reality is that most people see those things if you can show that you learned from them, which almost everybody does, it really helps in the long term.

Sam Corcos: I’ve written, just honestly for my own sake, a postmortem on each of the companies on what I did wrong, what we could have done differently, what the major mistakes were. Some of them are just specific tactical things. Like one of the biggest mistakes we made at Sightline Maps, because we didn’t really know anything about fundraising, we bootstrapped the whole thing until a couple years in and then we started raising money and we planned our fundraising around when we would run out of money. That seems perfectly logical when you’re a first-time founder, because why would you want more money when you don’t need money? But it turns out, if you raise money when you need it, nobody wants to give it to you, and we ended up taking money on terms that were really quite painful. Had we thought about it differently, we would’ve raised money earlier when we had more momentum, and that would’ve been a much better approach. Similarly-

Holly Shannon: Well, and you wouldn’t have been desperate, right?

Sam Corcos: Yeah.

Holly Shannon: Because they could smell the desperation.

Sam Corcos: Totally. Yeah, and similarly at CarDash, there were so many different lessons there. One of the big ones is around focusing on how we’re using our engineering time.

Sam Corcos: My philosophy on building software companies is that engineering is always the constraint. So anything you can do to free up engineering to moving the company forward to get your closer to product-market fit is really what you should be optimizing for. And at CarDash, we spent, in retrospect, way too much of our time building internal tools, and far too little time building products that our customers loved.

Sam Corcos: Some of this is just because a lot of the tooling that we have now didn’t exist back then. We used Retool at Levels, which is an incredible tool that makes internal dashboards much easier to make. People on our ops team can make dashboards in an afternoon that usually would’ve taken several days of engineering time. So it frees up that resource to be used for other things.

Sam Corcos: But it was really, I learned one of the lessons the hard way of making sure that we’re paying attention to what the end state is. I remember a moment where in our pitches in what we would tell to customers, we would say that our app at CarDash, the idea was you take a picture of your license plate, we pull up all of your history, we press a button, we have somebody pick up your car, we get it serviced, we bring her back same day. And a year in, we still hadn’t built much of that functionality because we were so focused on the logistics and improving unit economics.

Sam Corcos: And we let ourselves scale and grow too fast, which is kind of counterintuitive, but it’s one of the lessons that why at Levels we’re so focused on finding product-market fit before we scale things. We want to make sure that we explore all of the surface area. Because once you’ve committed to a path and all of your engineering time is spent scaling things and building these things out, it’s very hard to change the direction of the ship once it’s going too fast.

Holly Shannon: How far along are you in the process with Levels?

Sam Corcos: It’s coming along. Our team is about 22 people. I think we’ve raised 12 million. We raised our seed round from Andreessen in September, and we’re currently targeting a public launch sometime in Q3. But I tend to think of these things as more milestone-based than I think chronology-based. So if I had to guess, I would say some time in Q3 is what we’re targeting, but there’s a lot of surface area I’d still like to explore before we increase access.

Holly Shannon: That’s incredible. I hope you’re able to meet those numbers. You’ve learned so much along the way with the other companies, so it sounds like you’re on the right path. How many more-

Sam Corcos: I hope so.

Holly Shannon: How many more people are you looking to bring in?

Sam Corcos: We’re adding, I think, as many as eight or 10 more engineers this year. We’re mostly focused on engineering hiring. There’s a lot of things on our product roadmap that we really need to execute against.

Sam Corcos: One of the other things that we’re just as a company culture is we’re really engineering-heavy, which is not surprising, given that my previous roles have all been in engineering. So we’re planning to bring on a lot of engineers and really having an engineer and product-focused culture. I’d say we’re really focused on bringing on product-minded engineers, which are engineers who really want to dig deep into product and not just get the set of specs from the product team and implement those specs, but people who are really engaged in the process. So that’s another cultural aspect that we think about is the team composition.

Sam Corcos: In different markets, core competencies are different. So if you’re building a company where your core competency is customer segmentation and marketing, the quality of the engineering team is less important than the quality of the marketing team. So really focusing on bringing on those people who understand those things and who can iterate very quickly and who can do growth marketing are very important. Other companies have a clinical competency. So just knowing what your competency is, I think, really helps to drive the team composition and the company culture.

Holly Shannon: How would you share your company culture with these new people coming in so that you can optimize for that?

Sam Corcos: Yeah, I mean, a big part of it is I personally have a call with every person that we interview. I think several of my co-founders do as well for every person. I think there’s really no way around it to just make sure that… I think this is maybe apocryphal, but I think Elon Musk personally interviewed the first 2,000 employees at Tesla that they ended up hiring, which means that he probably interviewed way more than that for people that they didn’t end up hiring.

Sam Corcos: We do a lot of it through documentation. So we write down a lot of things. That’s one of our core values as a company is transparency and documentation. So usually when people start at Levels or even before they start, they have a lot of information on how our company operates. We share with them our team all-hands, we share our investor updates, we share our strategy documents, and it should give them a sense of how our team operates with each other and also, how we’re building things towards the future.

Sam Corcos: One of our recent hires mentioned to me that he after two weeks of working at Levels, he feels like he knows more about our company and our team than he did about his previous company, and he was there for five years. Just the sheer volume of documentation.

Sam Corcos: Because onboarding is such a priority for us in terms of culture, we try to ensure that people don’t feel pressured to have deliverables early on. You only get one chance to onboard, because then you have all these expectations and deliverables. So usually, the first week, we explicitly tell people that there are no deliverables. Your only job is to read this material, talk to the people on the team, learn as much as you can. And really, the first month is really focused on onboarding rather than trying to get them to start to contribute as quickly as possible.

Holly Shannon: Sounds like you’ve learned a lot from all your startups.

Sam Corcos: Yeah. I mean, one of the hard lessons… At CarDash, we scaled the team very quickly. I think we went from five or six people to 40 within about four months. That was really painful. We had a lot of people joining, which took a lot of overhead, especially in engineering as well. A lot of the new engineers that we brought on, we didn’t put enough effort into documentation and onboarding, and we ended up doing a lot more pair programming. Because that’s the crutch that you have to use if you don’t have a good documentation and onboarding process. You basically have to take your most expensive engineering resource and have them manually walk somebody through your code base.

Sam Corcos: So we weren’t able to scale the team very effectively. I think our engineering team went from two to eight during that time period, and our total output was basically static. So we increased the size of the team almost 5X, and the total output of the engineering team didn’t change at all. That was mostly because we had not done a very good job of creating processes around the stuff and making sure that people have the tools they need to be effective. So definitely one of the lessons you learn the hard way is that you really need to make sure people have the resources that they need to be successful.

Holly Shannon: Sounds like you figured it out and you leaned in on your friend, Darren, there with some good documentation.

Sam Corcos: For sure.

Holly Shannon: I think we’re getting near the end here, but I feel like it would not be complete if we didn’t get to know Sam just a little bit more on a personal level, because I love that we talked a lot about company culture within Levels, but I think it’s so interesting, a couple little tidbits that I learned about you is that you have these salon dinners on the East Coast and the West Coast. I think it’s really fascinating. Can you just tell us briefly about that? I think it’s just such a fun idea that other people might want to implement it in their lives.

Sam Corcos: Yeah, for sure. It’s something that really happened spontaneously, just knowing that I have a lot of interesting friends. I would host a dinner with usually eight to 10 founder friends of mine to talk about a pretty eclectic mix of different topics.

Sam Corcos: It’s a lot lower overhead than a lot of people expect. It’s really about solving for the 80, 20 here. It’s not about having decoration or really expensive food or wine. People come to see other interesting people and talk about interesting topics. They range from the philosophical, like we did one on pragmatism and postmodernism, to a salon we did on the wine industry. Some are industry-specific, some are experiential. Did one on human connection and friendship, another one on purpose. So it’s been a really interesting way of learning from other people.

Sam Corcos: To be honest, most of these are selfish. They tend to be topics that I personally don’t feel like I understand the answer. So my goal is to get other people who have thought about this who are smarter than me talking about it in my presence to help me come to a firmer resolution on it.

Holly Shannon: I think that is really interesting. I love how you create a theme around each one. I don’t know if you’ve ever read Priya Parker’s book, The Art of Gathering.

Sam Corcos: Yeah.

Holly Shannon: Okay. Nevermind. This is just for you, the listener, then. I just thought you’d really like that. But apparently, you did. So I will selfishly invite myself to your next salon, because I want to come.

Sam Corcos: For sure.

Holly Shannon: Well, I have a long history in the event space, so I live for those moments. One last thing I want to ask you, I want to know what you are reading now. I ask this question because I don’t think anybody will be able to keep up with you, because I also want to point out that I learned that you read two books a week and you listen to them at three and a half times their speed. So it’s not only do you read copious amounts of books every week, but it’s starring the chipmunks.

Sam Corcos: Yeah, that’s right. I started doing audio books as my primary mechanism probably eight years ago, and I think it was at 1.5X. And then over time, I just incremented up to 1.75 to 2X, and right now, I listen to 3X pretty comfortably. Sometimes I have to drop it to three if the author or the narrator has an accent or the content is really dense.

Sam Corcos: But currently, I just finished Robert Lustig’s newest book, Metabolical, which is really a takedown of processed foods and why they’re so incredibly bad for us. He talks a lot about how obesity is maybe not the thing that we thought it was. It’s maybe a symptom of something much more sinister, which is underlying metabolic dysfunction, and how processed food is really the primary culprit for why we have these problems. And that it’s possible to be overweight and still healthy. It’s also similarly possible to be thin or fit or even athletic and incredibly unhealthy. So that’s the most recent book I read.

Sam Corcos: I think the next book I have on my list is David French’s book, Divided We Fall, which is a book on civility, like civil discourse and the somewhat concerning trends around how we seem to be unable to have civil conversation as a… I would say as a country, but I don’t imagine this is just a localized phenomenon.

Holly Shannon: I think this past year with the pandemic and the election has made that book very timely. Wouldn’t you think?

Sam Corcos: Yeah, definitely.

Holly Shannon: So Sam, this is really amazing. I am so happy we had this time on Culture Factor with you, and I’m really excited for the growth of Levels. So I want to thank you for coming on the show.

Sam Corcos: Yeah, for sure.

Holly Shannon: Lastly, I just want to ask you before I consider closing down the room, because Clubhouse is about a community, did you want to field any questions?

Sam Corcos: Yeah, I have 15 minutes.

Holly Shannon: You have 15 minutes? Okay. So I am going to open up the floor. If anybody is interested in asking Sam any questions, you could raise your hand and when you do come up, I will ask you if it’s okay to record you in the event that we decide to keep that question on the podcast. So you could be on a podcast at the same time.

Holly Shannon: And I see that you also have Ben in the audience. Maybe you’d like to tell everybody a little about Ben while I bring up this next person.

Sam Corcos: Yeah, for sure. In fact, coincidentally, Ben is taking lead on our team on the culture project. He’s interviewing everyone on our team to try to synthesize and distill the way that we manage company culture.

Sam Corcos: Ben is our head of growth. He’s been really focused. We’re still very much exploring the different ways in which growth and the different ways that we manage growth within Levels. One of the big conclusions is that community is a big focus for us. So Ben’s taking leadership on that. He’s been really learning a lot of very interesting things about it.

Holly Shannon: It sounds like Ben and I need to have a chat. I’ve brought [Leo Roers 00:19:22] up to the stage. Are you okay with being recorded?

Leo Roers: Yeah, sure.

Holly Shannon: Go ahead, speak to Sam. It’s all yours.

Leo Roers: I just wanted to ask to Sam regarding the top books you recommend for… As you are Y Incubator ’17 founder and those things, I wanted to just know the top recommended books for having great speaking skills to be a great speaker, in that sense, how we can articulate better. Those type of good books.

Sam Corcos: Yeah, I think the classic book is… One of them is Dale Carnegie’s book, which is called something. What’s the name of that book? It’s a very famous book. It is How to Win Friends and Influence People. That’s the name of the book. That’s definitely a good one to think about ways of framing conversations in a way that can be productive.

Sam Corcos: I would say the shortest answer is practice. It’s a lot less to do with books, and a lot more to do with practice. I do a lot of customer calls. I don’t do as many anymore, but there was a point in time, in fact, May of last year, so about a year ago, when I think I did somewhere on the order of five to 600 customer calls in the course of several months of just talking to people and learning from them and trying different messaging out to see what would work for them.

Sam Corcos: There often isn’t a way of knowing how to frame something effectively. I would say not being coy about it, but I’m usually wrong when I have an assumption about something. The only way to test it is to put it in front of people and see if it lands. A lot of times it won’t, and that’s okay. You just have to keep going.

Sam Corcos: I think if I had to give a shorter explanation, it would be it’s much more important to be comfortable with a rejection than it is to learn how to be a good speaker. And just keep practicing at it and just be comfortable having people shut you down and tell you no. And try a different message and try different channels, try different mediums. The only way to know if something’s actually working is to put it in front of them and see how they respond to it. And just being okay with the fact that most of the time, people aren’t going to like it.

Sam Corcos: This has certainly been my experience in startups is that it’s really painful to spend a month working on something that you’re really proud of and you put it in front of people and just nobody cares. So oftentimes in a lot of these startups that I advise, they push off that moment because they don’t want to be embarrassed by the thing that they’re releasing. And they don’t want to face that rejection, so they push these things off for far too long.

Sam Corcos: I think there’s a Reid Hoffman quote that if you’re not embarrassed about your first product launch, you’ve waited too long. So embrace that embarrassment and just keep pushing forward.

Leo Roers: Thanks a lot.

Holly Shannon: I would love to add on to here, and Sam, maybe you’ve already read this book because you read a lot faster than I do, but Adam Grant recently wrote Think Again. And I think some of the art of speaking well is also wrapped up in your ability to be open in a conversation and hear the other side and even possibly be convinced of another opinion. And also, in order to do that, you need to actively listen. I think some of the best speakers that I’ve met throughout my career are people who actually listen more than they speak. So that would be my addition.

Sam Corcos: Yeah, definitely.

Holly Shannon: I will just thank you again, Sam. I think this has been amazing. I appreciate your time and I hope we can do this again when you are a huge success with Levels.

Sam Corcos: I hope so. We’ll talk soon.

Holly Shannon: I’m often asked, “Does my business need a podcast?” My answer is yes. That nothing else is the fast track into thought leadership and being established and seen as the expert in your industry as podcasting.

Holly Shannon: What’s increasingly evident is that it’s a branding machine. It kicks doors open for you to have conversations with leaders. It creates a pathway to partnerships and connections on a deeper level. Social media cannot begin to touch this level of traction. You will not be your industry’s best kept secret. Your ideas and business will have global reach. The added benefit will be tons of content you can repurpose across social media easily. No more writing blogs.

Holly Shannon: It also makes your sales force much more agile. Having a podcast is a great lead generation tool. It’s a pull marketing tool to bring people to your website, people that are interested in your product. So nothing works faster. Not to mention, it’s great for your search engine optimization. So step into your power. Go to hollyshannon.com to launch your podcast now.