Shipping Software To Solve The Metabolic Health Crisis, with Levels Co-Founder/CEO Sam Corcos | Episode 57

In this episode of The Ones Who Succeed with host Campbell Baron, Levels CEO Sam Corcos joins to discuss the process of building Levels. Sam covers the learnings he had from earlier startups, how to identify the right investors, Levels’ conscious choice to stay lean, and why there’s really no such thing as raising too much capital.

Think about your big picture goals

In school, Sam felt like he was always forced into things that didn’t interest him. Later on, he ended up taking a career break to think critically about where he should put his time and energy.

I’ve worked a lot of hours for a very long time and one of the things that really struck me was how I’d worked tens of thousands of hours and yet I’d probably spent cumulatively in my life fewer than 10 hours actually thinking about what I want to do. What matters to me and what I care about. And we just think about the disparity between those two things. It’s pretty shocking how – I don’t think I’m alone in that where you just go from new opportunities, come your way and new jobs, things just spontaneously happen and life can move forward. But a lot of that is undirected and that’s probably not good.

Lessons on raising funding

At a previous startup, Sam witnessed the trouble that comes from raising funding too late in the game.

I think with every company, you learn a lot about yourself and you learn about things that are really great. I think mostly you learn about the mistakes that you make. And my previous company Sightline Maps where I was also the technical co-founder. One of the biggest learnings that we had was, this was a lesson learned the hard way, “You should raise money when you have momentum and not when you’re about to run out of money.” That was a hard lesson learned. When you’re early on in your founder career, you think, all right, well, raise a million dollars and then we’ll start fundraising when we have like three months of runway left because that’s when we need money, and then we just go from there. The reality is that the more money you have the easier it is to get money, the less money you have the less likely people have to give you money.

The importance of communication

When you go MIA during a project, stakeholders can have a negative reaction even if your project is submitted perfectly and on time.

One of the things that I noticed through that process doing consulting was that oftentimes the projects where they would give me a spec, I would build the thing that even exceeded the specifications. It was way better, but I didn’t provide them regular updates or I didn’t have a big flashy presentation at the end of it. I just delivered it as ordered or better than ordered. They would be upset and they wouldn’t like the outcome, even though it costs less, it was done faster and it was better than they asked for. Similarly, there were projects where to test this, I would do exactly the opposite which was, I would send a lot of screenshots, a lot of regular updates. I would do weekly and monthly reports, like big, long PDFs of everything that was done. And the work product would be very subpar but the happiness of the customer was much higher and their perceived outcome was much higher, which was frustrating as somebody who likes doing very high-quality work. And so leaning too much on either of these extremes is bad but there’s clearly some middle ground that you have to strike of, what is a reasonable cadence of communication?

Software can take you many places

The companies Sam has worked with have been incredibly diverse, but they have all centered on building software.

I started building software because it’s a generalizable solution to a lot of different types of problems. I’ve had people ask me, “How did you get into healthcare technology? Your last company was in car repair. The one before that was topographical mapping for the U.S. military. And the one before that was in construction software.” And my answer is because I was basically building the same thing and all, all of those companies, I was building software. And the processes you learn from people what they want, you build tools and software to solve problems that they have, you continue to iterate and you learn from them and you just solve more problems. The fundamentals of all of those companies are basically the same.

Identify a decision-maker

The Levels team agreed early on that as CEO, Sam would have the final say on big decisions impacting the company.

I think one of the reasons why the co-founder dynamics certainly for teams that have a lot of co-founders cause problems, is people tend to be too conflict avoidance, and afraid to specify things in advance. I’ve been through this enough times to like very early on, say like, here are the roles that we all feel and we all have to agree that if push comes to shove, I am the CEO and we all agree that my decision will be the final decision. We have to agree on that. And you have to establish that. One of the reasons why a lot of co-founders split up or there is a lot of tension is it’s unclear where the final decision-making authority resides and it causes a lot of tension and then people, they don’t want to talk about it because it’s uncomfortable. And so you just let it fester and cause problems for both of you and everyone else in the company.

The choice to stay lean

The Levels team has purposefully kept a lean employee profile so that they are truly adding the right people at the right time.

We kept the team very small for a long time. In fact, we intend to keep the team pretty small for a long time. Hiring pretty senior people only, you have two options broadly speaking, in terms of hiring. You can hire from a place of pain where you are falling behind and you really, really need to hire somebody. Or you can try to hire proactively. At a startup, usually hiring from a place of pain is the better decision, just because burn is a real thing. I can tell you, having been at companies that have run out of money, it really sucks and it can feel like you’re invincible and that you can’t do anything wrong. But at some point when you run out of money, your company dies and that’s not fun. So keeping burn really healthy and making sure that you bring on the right people is super more important.

Set investor expectations

When you have a plan up front and communicate that to investors, you ensure that you end up with investors who are supportive of your vision.

If you can set expectations for the investors that you’re raising a lot of extra money and you’re going to grow, this is what we largely did which is, I was very explicit that we are going to grow at this particular rate. We’re going to grow at the fastest rate that we can sustainably. That might be slower than you’d like but I want to make sure that we solve this problem in the long term. And some investors will say no and like, that’s okay. You just need to get alignment on this and other investors will say, yeah, that’s the only way that you should build a company.

The pros and cons of raising “too much” capital

Many founders will regret the dilution that comes with raising excessive capital. But the plus side it that their company has succeeded and not failed.

When you talk to a lot of founders about whether they feel like they raise too much capital, almost every founder says, yeah, you know we took too much dilution, we raised too much money. But there’s a survivorship bias there because those are all the people whose companies didn’t die. I bet if you found all the people working at Google or other places that they took a more comfortable job because their startups failed say, would you like to have raised more money? They’d say, well, obviously. Sure, give me more dilution. If we had more money, then our company wouldn’t have died. I don’t think that there’s an easy answer other than you have to just be disciplined. And I think that it’s generally wise to have more capital available.

A minimal marketing strategy

Levels presence has grown through feedback loops with beta customers, not from an expensive marketing campaign.

I’ve been asked on other interviews and podcasts, what was your social media strategy? You guys are all over social media. And my answer is usually unsatisfactory which is that we quickly built an MVP and we shipped it to people and nobody liked it. And so we interviewed those people, we got a lot of feedback, we shipped another version and nobody liked it. We did that about 500 more times until people started liking it. And then it turns out when people like your product, they posted about it on social. That was our social. There hasn’t really been any intent beyond that.

Reaching an inflection point

In 2020, the team incorporated new features that led to real traction and growth.

I think the inflection point was in probably May or June of last year when we started adding composite metrics like meal scores and aggregate day scores, and some of these simplification and abstraction layers that made it really easy to understand and how your choices were affecting you. That was when things really started to pick up. And that was just through reiteration. We run an experiment, turns out people didn’t like it, kill the experiment, try a different one. And we just kept shipping. We ship a lot. A big part of our philosophies really, our whole company is really built around maximizing development velocity. It’s like the cool or focus of our team. It mostly just stems from my own background as a software developer, where building really excellent software comes from iteration. And how do you free up engineering to be as productive as possible? Engineering philosophically is always the bottleneck of every software company. The more you can do to free up engineering resources, the faster you can move as a company.

Campbell Baron: Before we start this episode of The Ones Who Succeed, I want to send a quick shout out to our friends at E2: Entrepreneurs Exposed, launched back in 2018. It’s now one of the fastest growing entrepreneurship podcasts in Canada, recorded right here in Toronto. Previous guests on the show include interviews with folks like Bruce Linton of Canopy Growth, SkipTheDishes Co-founder Jeff Adamson, Mike Gettis of Endy, Brian Scudamore, Founder and CEO of 1-800-GOT-JUNK, Michael Hyatt, Founder of BlueCat Networks, Brian Smith, Founder of UGG Boots, and many other impressive entrepreneurs.

Campbell Baron: You can listen to the show wherever you get your podcasts. Just search E2: Entrepreneurs Exposed. That’s E2: Entrepreneurs Exposed. This week on The Ones Who Succeed, a conversation with level’s co-founder and CEO, Sam Corcos.

Sam Corcos: I would rather take a $5 million marketing budget and put that into $5 million of improving the product for our members. You can do a lot with $5 million of engineering time as opposed to $5 million in performance ads to get a few more customers.

Campbell Baron: That’s this week on The Ones Who Succeed. I’m Campbell Baron. Welcome to the program. Sam Corcos is the Co-founder and CEO of Levels Health. Levels is a super hot startup backed by top Silicon Valley investors on a mission to solve the metabolic health crisis. I just wanted to throw in a special, thanks here to Ben Grenell for facilitating this introduction. He is the head of growth at Levels and a friend.

Campbell Baron: Sam, who is a digital nomad joined this program via Zoom from Los Angeles today to discuss the origin story of Levels, raising over $12 million from prominent venture capitalists, including injuries and Horowitz. And at the end of the program we discussed why Sam built Levels intentionally designed to be a remote first company from day one. Sam, thanks for coming on the program.

Sam Corcos: Good to be here.

Campbell Baron: I’m thrilled to have you on the show. I’m a very big fan of Levels and very big fan of your, I would say operation and management style. We’ll dive into that. But before we get into all of that, we have a lot of catching up to do in regards to what Levels is in the origin story. I guess my first question would be, how would your parents or how would one of your close friends in and around your childhood, how would they describe you?

Sam Corcos: I played a lot of sports growing up. I played basically all the sports. I did soccer and track in high school. I did wrestling and baseball and basketball. I did football and rugby in college. I played a lot of sports, mostly because I was extremely bored in school. Topics that I spend a lot of time thinking about is how do we make school less boring?

Campbell Baron: I think a lot about that too, Sam. I’m not joking. In my last year of high school, I made a documentary series on education and the flaws in the future and it’s something I’m very interested in.

Sam Corcos: Somebody that might be worth talking to, if you haven’t already, is David Perile. He and I were talking a couple of weeks ago and he mentioned this. His theory for why education is so boring is that we’ve conflated the ideas of education and childcare.

Campbell Baron: Interesting.

Sam Corcos: I think he’s 100% right, the more I think about it. Because I’ve talked to a bunch of parents just to get their take on it. And I think for them, school is like 90% childcare and the education is a positive externality from childcare. By conflating these two concepts, I think we’ve let ourselves down the wrong path.

Campbell Baron: What specifically about that experience was not engaging? Let’s just say.

Sam Corcos: Part of it is I think being forced to learn certain things that I wasn’t especially interested in. It’s interesting how at different stages of life, you’re interested in different things. And I really believe that people should not do the things that they don’t want to do. When I was in eighth grade, I was not interested in reading Shakespeare, but I was forced to. And so as a result, I got really good at cheating on tests and on reading SparkNotes and figuring out what things will be on the test without actually reading the material. I think I made it through all of high school without reading a single book.

Campbell Baron: Same, SparkNotes, video summary. Julius Caesar video summaries. That’s what got me through.

Sam Corcos: Exactly. You know based on your teacher, it’s like, okay, this teacher is going to ask me about similes so I have to just memorize the five similes that SparkNotes tell me are in this book. You don’t really get any useful content, you just learn how to follow the rules and not get in trouble, which I guess has some gross value but I don’t think it’s net valuable. Then at the same time now, I like reading Shakespeare. I think it’s really interesting.

Sam Corcos: I think back then I would have been much better served reading Lord of the Rings or frankly, anything other than what I was forced to do would have been useful to move down the path of doing something that I found interesting. I would have been much more interested in things like shop class, woodworking and building things would have been really fun. I probably would have been really interested in software development if I was exposed to it at that age, but we didn’t have that. Basically, computer class when I was in high school was everyone sits down and plays The Oregon Trail. Just a classic millennial joke but it’s not a joke.

Campbell Baron: Well, okay. This is interesting because it sounds like in high school, the entire objective, in my opinion was far less about the actual quality of the education, far more about how you did on tests. So you would have a high GPA and so you can go to a nice college and then in college you’d be able to figure out what you’d want to do. If that’s your objective, which for many folks it is, because college has a wonderful brand in the America.

Campbell Baron: It’s like, it’s crazy. It’s something that you’re willing to pay for over hundreds of thousands of dollars for. But doing shop class per se, that doesn’t necessarily lead to Harvard. It’s almost like you’re not optimizing for subject matter that is interesting, you’re optimizing for subject matter that looks good to schools.

Sam Corcos: If what you’re optimizing for is status and approval from others, then sure this go down, become an investment banker work at Goldman Sachs. These are all valid life choices, but they tend not to lead to the happiest people. A really interesting book that I wish I had read when I was younger, but it didn’t exist when I was younger, it came out after college is Andrew Yang’s book, Smart People Should Build Things. I mentor some college students and people who are just after college and who sort of going through the classic quarter-life crisis of, what do I do with my life? Not that you can relate to that.

Campbell Baron: I think I can. Everyone can.

Sam Corcos: And for me it was a frighteningly familiar book where he talks about the experience of social pressure and family pressure of going to the right school, getting a high prestige status job as a banker or a lawyer. And how so much of that is driven by these external forces that feels like you’re being pulled in by the tide and you don’t really have a choice in your own life. This is something that I’ve really found for myself. It really has only been in the last maybe three or four years that I feel like I really made the transition from the passenger to the driver of my own life. It’s felt like for a very long time. And it’s hard to notice it when you’re in the hamster wheel, but where I stumbled into every opportunity.

Sam Corcos: There’s a saying, I don’t remember who is the quote but “Luck is when preparation meets opportunity.” And I was very lucky all the time of just interesting new things, but just bump into me and I would take the opportunities and the ball would be moved forward and it was great. I had never really had intent in those decisions. I had not spent the time to really think about what I care about. And it was interesting when you reflect on times spent.

Sam Corcos: I’ve worked a lot of hours for a very long time and one of the things that really struck me was how I’d worked tens of thousands of hours and yet I’d probably spent cumulatively in my life fewer than 10 hours actually thinking about what I want to do. What matters to me and what I care about. And we just think about the disparity between those two things. It’s pretty shocking how – I don’t think I’m alone in that where you just go from new opportunities, come your way and new jobs, things just spontaneously happen and life can move forward. But a lot of that is undirected and that’s probably not good.

Campbell Baron: I want to ask a question, a follow up question here which is, at what point in your life did you first hear the word startup or startups?

Sam Corcos: Probably pretty young. I think Facebook came out when I was in high school. I remember, and there were people at the school who had an invite and it was invite only, and I didn’t, all the cool kids have them.

Campbell Baron: It’s like Clubhouse before Clubhouse.

Sam Corcos: Exactly. It started out like only people within Harvard if I remember correctly and then it expanded out from there. I think it was probably something very early on. I don’t think it had the same aura of positivity as it does now, where it was very much the case that working at Google or some of these bigger tech companies. I remember the timing of when Google became a big thing. But working with some of these bigger tech companies is definitely a much more prestigious thing to do.

Sam Corcos: Although frankly, in the circles that I was in working at Goldman Sachs was like the pinnacle of jobs that you can have. So startups are not really on my radar until probably after college. It was a thing that I knew about, but it wasn’t really something that I thought about pursuing.

Campbell Baron: Interesting. So walk me through you were the founder co-founder of a YC backed company called CarDash, which was eventually acquired. And this is interesting because in this case you’re not a first time founder. And I’m going to assume after talking to 50 plus folks on the program that that car dash experience was a great education in regards to the do’s and don’ts that come along with entrepreneurship. Am I correct in that assumption?

Sam Corcos: Absolutely. I think with every company, you learn a lot about yourself and you learn about things that are really great. I think mostly you learn about the mistakes that you make. And my previous company Sightline Maps where I was also the technical co-founder. One of the biggest learnings that we had was, this was a lesson learned the hard way, “You should raise money when you have momentum and not when you’re about to run out of money.” That was a hard lesson learned.

Sam Corcos: When you’re early on in your founder career, you think, all right, well, raise a million dollars and then we’ll start fundraising when we have like three months of runway left because that’s when we need money, and then we just go from there. The reality is that the more money you have the easier it is to get money, the less money you have the less likely people have to give you money.

Campbell Baron: The incentives aren’t always there.

Sam Corcos: That’s right. And that was a lesson that we learned the hard way. And I can go into the details of how we had to deal.

Campbell Baron: Please, please we’re here. So let’s do it.

Sam Corcos: Yeah. We had a term sheet from a fund. Basically, I think we started raising with three months of runway. We had a term sheet. I think we may be even signed the term sheet, everything seemed like it was fine.

Campbell Baron: And what round was this?

Sam Corcos: This was just our seed round-

Campbell Baron: Seed around.

Sam Corcos: … initial capital. We had bootstrapped it up until that point. And then they sent us a message and said that they had a reorg in the company they’re changing their capital strategy and they’re pulling out of the deal and that point we-

Campbell Baron: And a term sheet for our listeners, it’s great, but it’s non-binding.

Sam Corcos: Yeah. We now have like a month of cash left and we went to the other investors who were doing follow on capital and said, “Hey, look, we still have enough capital available in this round, even though the lead pulled out so we can still do this.” And they said, “Oh, well, they probably found something weird and we’re pulling out too.” And everyone pulled out. We ended up taking money on terms that we were not very happy with.

Sam Corcos: And I wasn’t super involved in this process. I was mostly on the software side but I certainly heard a lot of conversations about it when it was happening. And that was definitely a lesson that you learn the hard way where it’s really important to have leverage into raise money when you have that leverage. If you’re waiting until you’re out of money, it’s too late. I learned a lot about stakeholder communication and interpersonal dynamics.

Campbell Baron: Okay. So talk about stakeholder communication. This is something I want to double click on here. I’m very interested in this. What do you mean by that?

Sam Corcos: There’s a certain baseline level of trust that you have to have with people that you work with, but at the same time, you have to communicate with them. This was something that I learned in a different capacity when I was doing a lot of software consulting. My role at Sightline was mostly part-time. The product was largely built and it became a sales problem for at least the last year of the company’s life cycle. I was doing a lot of software consulting, just building MVPs and projects for people.

Sam Corcos: One of the things that I noticed through that process doing consulting was that oftentimes the projects where they would give me a spec, I would build the thing that even exceeded the specifications. It was way better, but I didn’t provide them regular updates or I didn’t have a big flashy presentation at the end of it. I just delivered it as ordered or better than ordered. They would be upset and they wouldn’t like the outcome, even though it costs less, it was done faster and it was better than they asked for.

Sam Corcos: Similarly, there were projects where to test this, I would do exactly the opposite which was, I would send a lots of screenshots, a lots of regular updates. I would do like weekly and monthly reports, like big, long PDFs of everything that was done. And the work product would be very subpar but the happiness of the customer was much higher and their perceived-

Campbell Baron: Interesting.

Sam Corcos: … outcome was much higher, which was frustrating as somebody who likes doing very high quality work. And so leaning too much on either of these extremes is bad but there’s clearly some middle ground that you have to strike of, what is a reasonable cadence of communication? What are the types of information that they need to feel secure that the project is coming along effectively?

Sam Corcos: Because basically if you just go into a cave for a month and then you emerge, they’re building anxiety and resentment over the course of that entire month, where they’re not hearing from you, they don’t know what’s happening and then you surprise them at the end with something. But those resentments have built up for so long that it’s hard to overcome that. We put a lot of effort at Levels into stakeholder communication. We have our weekly Friday forums, which we are improving every week. I think you’ve probably seen one or two of those.

Campbell Baron: Absolutely.

Sam Corcos: We try to make sure that engineers include screenshots. In pull requests we have long notion pages for every feature so that people externally, or I guess outside of engineering can see where things are and what the progress is and can understand at least the problem space. They don’t necessarily need to understand the specific implementation but they understand the problem being solved. I think that in general, that type of stakeholder communication is just extremely important for a team cohesion.

Sam Corcos: I’ve seen a lot of teams where the engineering team feels like a separate entity and they’re often vilified by everyone else in the company because they don’t feel like they’re moving fast enough, they don’t understand the problems that they’re solving and they’re just in general, the communication between engineering and other stakeholders is poor.

Campbell Baron: That’s very interesting. I want to ask you a question in particular about how you see yourself as an entrepreneur because from my I guess, experience interviewing the folks on the show, I think there are people in two different camps. I think there’s entrepreneur A, who he or she can really do anything. They just look at a market or multiple markets and can spot opportunities.

Campbell Baron: Then entrepreneur B, seems to be a little more focused in their interest and maybe we’ll just focus on media or will just focus on real estate or will just focus on healthcare. And they may be a serial entrepreneur but over and over again, they’ll kind of stick to that. Where do you fall on that spectrum? Coming up. I continue my conversation with Levels Co-founder and CEO, Sam Corcos. That’s all head on The One Who Succeed. Stay with us. Welcome back to the program.

Sam Corcos: I would say pretty firmly in the first category. I started building software because it’s a generalizable solution to a lot of different types of problems. I’ve had people ask me, “How did you get into healthcare technology? Your last company was in car repair. The one before that was topographical mapping for the U.S. military. And the one before that was in construction software.” And my answer is because I was basically building the same thing and all, all of those companies, I was building software.

Sam Corcos: And the processes you learn from people what they want, you build tools and software to solve problems that they have, you continue to iterate and you learn from them and you just solve more problems. The fundamentals of all of those companies are basically the same.

Campbell Baron: At what point. Let’s you mentioned Levels. Let’s double click on that. You mentioned you had a call with Josh and what was the context of that call before you had it?

Sam Corcos: I make an effort to stay in touch with a lot of people. My target is to stay in communication with a thousand people I care about for quarter. And it’s that’s a lot.

Campbell Baron: That’s a lot. Yeah.

Sam Corcos: Yeah. I don’t always say that but that’s my target. And Josh is one of the people that I’ve had on my list for a long time. And so-

Campbell Baron: Is this a legitimate list? Is this a real list?

Sam Corcos: Yeah.

Campbell Baron: When you say keep in touch, what does that mean to you?

Sam Corcos: Ideally, it’s in person. When I was living in New York, I had a breakfast meeting every day at 8:00 AM. I would host weekly dinners with eight to 10 people. I would optimize for in-person, if I couldn’t do in person, then I would settle for a call. I couldn’t do a call, I would at least do an email, if I couldn’t do that couldn’t do that, I would just like send them a text or something. But just some touch point of just knowing what they’re up to. And so Josh is somebody that I’d known, I think at that point for maybe three or four years, and we’d stayed in touch. He was at SpaceX, I think he just left SpaceX.

Sam Corcos: My other co-founders are also people that I’ve known for a long time, like David, who runs product for us, I’ve known him for probably seven years by that point, maybe six years. I’ve known David for a long enough to where, like we spent a couple of weeks together on a polo farm in Argentina learning how to play polo. We did all kinds of stuff. Most of the people on the team are basically in network, certainly the co-founders.

Sam Corcos: And really, Casey is the only person that I didn’t know before starting the company. And in many ways, she’s the exception that proves the rule because I’ve known her brother for many years. And when her brother heard about what we were doing said like, “You have to talk to my sister, she’s been talking about this for years.” She was just like the perfect fit for what we’re looking for.

Campbell Baron: Okay. Let’s talk about this. I’m sure you’ve heard the expression too many in the kitchen. It’s well known that startups that have co-founders are typically more loved by venture investors and team members just because of de-risks it that’s no secret. Now co-founder that could mean one person, that’s common that could mean two people. I find it’s less common per se to have five people-

Sam Corcos: Yeah.

Campbell Baron: … for better or for worse. But in this situation, it seems like it was very much necessary. Why is that?

Sam Corcos: I think one of the reasons why the co-founder dynamics certainly for teams that have a lot of co-founders cause problems, is people tend to be too conflict avoidance, and afraid to specify things in advance. I’ve been through this enough times to like very early on, say like, here are the roles that we all feel and we all have to agree that if push comes to shove, I am the CEO and we all agree that my decision will be the final decision. We have to agree on that.

Campbell Baron: And that’s known?

Sam Corcos: Yeah. And you have to establish that. One of the reasons why a lot of co-founders split up or there is a lot of tension is it’s unclear where the final decision making authority resides and it causes a lot of tension and then people, they don’t want to talk about it because it’s uncomfortable. And so you just let it fester and cause problems for both of you and everyone else in the company.

Sam Corcos: I don’t think that we’ve even to date had a situation where I had to just like, say, this is the final decision, even though people disagree on this. We are largely collaborative as a team and we’re largely on the same page. There have been some times when we’ve had some disagreements on very specific things, but nothing that meaningful. That’s the important thing, is making sure you have a clear decision making authority on different things that need to be decided upon.

Campbell Baron: I think that makes a lot of sense, and I think you’re absolutely right. It does come down to the final decision there. In regards to your roles, let’s talk about that, how do you divvy up the work?

Sam Corcos: I think the answer is we try to make sure that the people doing the work are… I think about a lot of these things in terms of what are the things that certain people can do that no one else can do.

Campbell Baron: Uniqueability?

Sam Corcos: Yeah. What is their uniqueability? We’ll take Casey as an example. She can talk to press, she can write really excellent content with medical backing. She’s a doctor from Stanford. There were a lot of things that I trust Casey to do, like going on podcasts that really only she can do. And there were other things like digging into the science of Raman spectroscopy, which really only Josh can do from his background at SpaceX. And I trust the outcome that he determines and we make decisions based on that.

Sam Corcos: You just have to find, what are the things that are important for the company and who is the best person for those things? I think the way that I think about hiring is one of the exercises we do is everyone about twice a year puts together and the areas of responsibilities map of what are the things that you’re responsible for. And I think of hiring and personnel in terms of who is responsible for what.

Sam Corcos: We can actually take a perfect example, we can use Casey my co-founder, where she put together one of these maps, I think in August of last year. A lot of her time was spent on content and editorial. A lot of her time was spent on podcasts. A lot of her time was spent on press. A lot of her time was spent on clinical. And we went through this and I asked her, “You’re very good at these, which of these do you like doing? And which one do you don’t like doing?” And she said, “Well, I really don’t like doing all this editorial work.” And we basically just cut out that entire slice and said, “Well, the slice of responsibilities you have here is the definition of an editorial director. You’re doing eight different job, so let’s just take that slice.”

Campbell Baron: Now you’ll do seven.

Sam Corcos: Exactly. We sliced that out. We searched for several months and we ended up finding my teammate, who was an editor at Popular Science for almost 15 years and now he’s running editorial at levels. And he’s been excellent. There were a lot of different philosophies around hiring and there’s no easy answer for who to hire and when. I think the safest and most consistent way is to know who is responsible for what.

Sam Corcos: Our head of operations, Miz, one of his big chunks of responsibility is member support. And we will likely be able to find somebody to fill that role to free him up to do other things in the near future. Other times, you have a really great person. Josh Mohrer is a good example of somebody. He was the general manager of Uber in New York and he wanted to join Levels. And we looked at each other and said, “Well, I’m not really sure what thing he’s going to take over, but I’m pretty sure he’s going to add value.” So we brought him on the team and he’s been excellent. And so there isn’t really a perfect answer for this other than you have to experience and judgment.

Campbell Baron: A lot of early company building is hiring out your initial team, building out your initial team. Though I’m curious, so if you’re one founder that has to happen pretty quickly, if you’re two founders that likely does. If you’re five, I’m wondering from your experience if it replaces the urgency to make those initial set of hires, because five people can accomplish quite a lot.

Sam Corcos: Yeah. There really isn’t a difference between having one founder and four really excellent first hires than it is to just have five co-founders. In our case, we kept the team very small for a long time. In fact, we intend to keep the team pretty small for a long time. Hiring pretty senior people only, you have two options broadly speaking, in terms of hiring. You can hire from a place of pain where you are falling behind and you really, really need to hire somebody. Or you can try to hire proactively.

Sam Corcos: At a startup, usually hiring from a place of pain is the better decision, just because burn is a real a thing. I can tell you, having been at companies that have run out of money, it really sucks and it can feel like you’re invincible and that you can’t do anything wrong. But at some point when you run out of money, your company dies and that’s not fun. So keeping burn really healthy and making sure that you bring on the right people is super more important.

Campbell Baron: Okay. This is brilliant, Sam. It’s almost like you’re looking at my notes here. The next thing I wanted to talk about was raising money. I’m curious because it seems like we’re in this really hot market right now in terms of startups. It’s the talk of Silicon Valley and beyond. And as a result, there are two sides to every coin, and one of arguments is that you should take as much money as you can while it’s available and just raise as much as possible. And the other argument is like, you actually mentioned this which is just raise when you need to, which is usually tougher.

Campbell Baron: But at the end of the day I do find that oftentimes in startups, and it’s not a secret that profitability and making money is something that often is a priority much, much later. And that can work, it goes both ways. It also appears that there are situations where raising a lot of money early on can essentially incentivize bad behavior because it covers up a lot of flaws. How did you approach raising money in the case of levels? I believe you raised a precede round in June of 2019.

Sam Corcos: I think the summary answer is you should raise as much money on the best terms as possible, as quickly as possible but there’s nuance to all of these things. One of the nuances is that if you take a lot of capital on very good terms, let’s say you’re a pre-seed company and you raise money at 100 million cap, just insanely high for AE company that comes with the expectation that you’re going to use that money to get you to the next milestone to be able to surpass that if you want to raise more money or you have to get to profitability, you either need to get to the next milestone with the money you just raised or get to profitability.

Sam Corcos: I think that the challenge is more cultural than anything where I actually have a friend who raised a lot of money. And raising the capital came with a headcount requirement from the VC firm because they wanted them to grow faster and they were required to hire a certain number of people in the next year. And it caused tremendous problems for them because it probably shouldn’t have hired that many people, but they were required to. Then they ended up bringing in a lot of people that really weren’t that great and it caused a lot of issues for them.

Sam Corcos: I think that a lot of this is a cultural question. If you can set expectations for the investors that you’re raising a lot of extra money and you’re going to grow, this is what we largely did which is, I was very explicit that we are going to grow at this particular rate. We’re going to grow at the fastest rate that we can sustainably. That might be slower than you’d like but I want to make sure that we solve this problem in the long term. And some investors will say no and like, that’s okay. You just need to get alignment on this and other investors will say, yeah, that’s the only way that you should build a company.

Sam Corcos: I would say that the interesting caveats to this, is when you talk to a lot of founders about whether they feel like they raise too much capital, almost every founder says, yeah, you know we took too much dilution, we raised too much money. But there’s a survivorship bias there because those are all the people whose companies didn’t die. I bet if you found all the people working at Google or other places that they took a more comfortable job because their startups failed say, would you like to have raised more money? They’d say, well, obviously. Sure, give me more dilution. If we had more money, then our company wouldn’t have died. I don’t think that there’s an easy answer other than you have to just be disciplined. And I think that it’s generally wise to have more capital available.

Campbell Baron: Right. I heard a story from a friend whose company they were raising an A and one of the notes their perspective investors made was that their burn was too low. And so they need to increase their burn. And it’s interesting. Because it seems like a lot of the typical law of business are flipped upside down in a venture context. But I think at the end of the day, there are often a lot of companies that are pushed into a venture model, even though they shouldn’t necessarily be in one. But venture capital is there for a reason and when it works, it works really, really well.

Sam Corcos: And actually to your question around profitability, it’s interesting because I think that was definitely a thing in the Facebook era where you figure out monetization later. I think it’s much less so now. There are some notable exceptions like recently Clubhouse is one that has a lot of hype and really not a revenue model, at least as far as I am aware of. But for the most part, a lot of these companies, a lot of these SaaS companies for example, you could argue that they’re overvalued but these are not zero revenue companies.

Sam Corcos: If you can say a revenue multiple of 10 or 15 is crazy, but they have meaningful revenue that’s growing at a very fast rate every month. I think that it’s a different type of problem. It’s really now a question of, are they relatively overvalued or undervalued as opposed to like, are these this vaporware companies?

Campbell Baron: Hype. You mention that. You’ve seen the tweets in regards to Levels being a hot company on the rise. And you’ve also been in tech for quite a while, a lot longer than I’ve been interested in it, probably before I was born. And as a result you’ve seen hot startups come and go. And we are very much in an era where there are certainly hot startups. I believe that Levels is one of them. Does that at all worry you that since this dynamic in this climate can change so quickly, some companies are here today, gone tomorrow? Especially in the context of being a CEO of company that is currently hot? All right, we’re going to take one last quick break and we’ll be right back with Levels Co-Founder and CEO, Sam Corcos. That’s all I had on The Ones Who Succeed, stay with us. Welcome back.

Sam Corcos: I think that you can’t really spend too much time thinking about that stuff. We haven’t really done a lot to generate a hype cycle. I’ve been asked on other interviews and podcasts, what was your social media strategy? You guys are all over social media. And my answer is usually unsatisfactory which is that we quickly built an MVP and we shipped it to people and nobody liked it. And so we interviewed those people, we got a lot of feedback, we shipped another version and nobody liked it. We did that about 500 more times until people started liking it. And then it turns out when people like your product, they posted about it on social. That was our social. There hasn’t really been any intent beyond that.

Campbell Baron: The feedback loop.

Sam Corcos: Yeah. And it’s kitschy but like the YC motto of ‘build something people want’ is really the fundamental question here. We still haven’t spent any money on marketing. I would rather take a $5 million marketing budget and put that into $5 million of improving the product for our members. You can do a lot with $5 million of engineering time as opposed to $5 million in performance ads to get a few more customers. That’s the way that I think about company building broadly, is building a really excellent experience, having a finger on the pulse of your members.

Sam Corcos: We have one person on our team, Mike, whose full-time job is just to interview our members and to learn as much as we can from them all the time. And we’ve had that since the very beginning, he’s constantly getting in touch with them. I do weekly calls every Friday with usually about five or six of our members as a community call, just to see how people are experiencing the product right now and to learn as much as we can from them. I’ll often float new ideas and see if they stick and that influences is a lot of the way that we think about building the product.

Campbell Baron: What was the MVP of Levels? You team up with Josh and your founding team, and then what do you do?

Sam Corcos: Well, our initial thought was the problem to be solved here is just access. We solved for some of the distribution problems, we solved for some of the regulatory problems and we just sent them hardware. The thing that we discovered from this is that people were really interested in this conceptually, but just having raw data is not super useful.

Campbell Baron: Yeah. Numbers don’t really matter if you don’t see the context.

Sam Corcos: Yeah. We had this recognition pretty early on that the contextualization layer is really what needed happen. We built some software very quickly that did some basic food logging, that contextualized the data a little bit more, that really just improved on the existing software. And then over time, as we learned more from people, we realized that okay, how do we make this simpler? I still don’t think that we’ve hit product market fit. I think that we have early indications of product market fit where we are now.

Sam Corcos: I think the inflection point was in probably May or June of last year when we started adding composite metrics like meal scores and aggregate day scores, and some these simplification and abstraction layers that made it really easy to understand and how your choices were affecting you. That was when things really started to pick up. And that was just through reiteration. We run an experiment, turns out people didn’t like it, kill the experiment, try a different one. And we just kept shipping. We ship a lot.

Sam Corcos: A big part of our philosophies really, our whole company is really built around maximizing development velocity. It’s like the cool or focus of our team. It’s mostly just stems from my own background as a software developer, where building really excellent software comes from iteration. And how do you free up engineering to be as productive as possible? Engineering philosophically is always the bottleneck of every software company. The more you can do to free up engineering resources, the faster you can move as a company.

Campbell Baron: Though this was your first role as the founder of a company where you weren’t doing engineering day to day. How do you go from being a CTO for all these past projects to being a CEO? That has to be a little bit of a change.

Sam Corcos: Yeah, it was definitely weird. It took a while to get comfortable letting other people play with my Legos.

Campbell Baron: Exactly, exactly.

Sam Corcos: But I have very high confidence in Andrew, my co-founder, to you run engineering and he’s done an excellent job, which really helps a lot. It’s nice working with really excellent people. The number of times when I’ve had some question or some anxiety about a thing and then I send an email or I probe on something like, “Hey, whatever happened to that one thing? Or how are we doing on this thing?”

Sam Corcos: And this happened not too long ago with David, our head of product, my co-founder where in the shower, I had an idea for something that we should have in the product and I spent the next hour putting wire frames together, writing a notion docs, listing all the stuff and I sent it over to him and he said, “Oh, this is cool. So you probably didn’t see this other notion doc that we wrote several months ago here are actually the wire frames. Here’s a walkthrough video of what it could plausibly look like and here’s where it is on a product roadmap.” And it’s like, “Okay, I’ll do something else now. I’ll try to solve other more useful problems.” It’s a really good feeling when you have that.

Sam Corcos: I would say the biggest thing for me is finding another way of getting the same satisfaction of deep work focused time. When you’re an engineer, you’re shipping things a lot. There are these specific deliverables that are really gratifying to ship. My role as a CEO is very different. I just mostly process email all day. I’m an information router. I was analogizing this the other day to give, if the company is a steam engine, I’m basically just the lubricant. I don’t actually have a useful function other than to make sure the other functions are working properly.

Sam Corcos: Which is probably the right thing for me to be doing. But it definitely leaves a void of having tangible deliverables. In our forums, we have a weekly highlight of the big things that the company did that move things forward. I think I have had in the last six months, maybe one thing to contribute to that. Because my job doesn’t really have deliverables. My job is to facilitate other people’s deliverable. But what I have found is that transitioning that need that I have for deep focused work into writing has been very positive, I write a lot of internal company documentation, a lot of thoughts about strategy.

Sam Corcos: I take a think week every quarter, which is basically a week off of meetings and phone calls and I just mostly write and read during that week. I usually come out of these things with oftentimes more than a hundred pages of written content from the week-

Campbell Baron: Wow.

Sam Corcos: … like new company strategy.

Campbell Baron: That’s impressive. Wow. That’s interesting. I want to talk quickly about raising money and then I want to end off here, by end off, I mean go into remote work. In November or the fall of 2020, you announced around led by Anderson. Walk me through that.

Sam Corcos: The fundraising process was, I would say, slow and intentional. We were very transparent. And so I looped in the Andreessen team, I think in February of that year. It was really just like an intro call. And I told them, “Look, we’re planning to raise our round later in the year. So what I’ll do, I’ll loop you in.” I send monthly investor updates and included them in the monthly investor updates, just so they could see the progress over time.

Sam Corcos: We write a lot of content, so our business model, our personas, our hiring plan, our hardware strategy for working with the manufacturers, our product roadmap, all of these things are written in long form documentation. Honestly, by the time it came to the point where we wanted to raise the round, it was largely a solved problem. The partner meeting was, there weren’t really any substantive questions that had not already been answered, so it was pretty casual.

Sam Corcos: A lot of companies, it’s all very last minute. That’s one way to do it. I know people who have raised money very successfully by not giving any information and then very quickly at the end, quickly rushing to raise the round and pressuring firms to put term sheets out very quickly. That works. That’s the exact opposite of the strategy that we took. I think there are many ways to solve this problem.

Sam Corcos: For us we took the route of… I think because we had so much confidence in our ability to execute on this. Just being very transparent every month. Saying the things that were going super well, also the things that were not going well and just showing progress every month and just having that drum beat of progress. So that by the time we contacted saying that we wanted to consider raising the round, it was a pretty easy process.

Campbell Baron: I want to pivot here to remote work. And I want to start by saying that Levels has been remote pre pandemic, and you are a digital nomad. You were, I guess you’re in California now. You were digital nomad since 2013-

Sam Corcos: Roughly.

Campbell Baron: Roughly 2013. Okay. Why? Why remote work? Pre-pandemic I would say it was certainly on the rise but nowhere near mainstream. So why did you take the then contrarian approach?

Sam Corcos: It was definitely controversial. We had a number of funds explicitly pass on us because we were a remote team-

Campbell Baron: That did not age well.

Sam Corcos: Yeah. I know. My thought around it, is if you’re building a software company, you don’t really need to be physically located anywhere. Because the reason the term digital nomad, the digital is the term. It’s not hardware nomad. It’s very difficult to build hardware in a distributed remote environment because you need atoms. But if you’re in a remote setting, it doesn’t matter if you live in Argentina or Mexico or New York. It’s all the same. It changes the interpersonal dynamics somewhat.

Sam Corcos: But my thought around this was that, if you build the company intentionally remote from day one, and you bring on the types of people who opt in to remote work, you’re going to get the kinds of people who… something that I found is a really good indicator of success in remote is people who really value deep focused work. People who don’t like taking meetings. People who also have a social life outside of work.

Sam Corcos: This is not a good thing or a bad thing, this is just a trade off that you have to make as a remote team, is if you are a co-located team, oftentimes all the people you work with will become your new best friends. And it’s very likely that if you work for a fully remote team and you don’t live anywhere near anyone you work with, those are not going to become your new best friends. You’re going to like them. You’re going to get along with them and you’re going to work well with them, but you probably need to have a social life locally whether that’s your local community or people that you play sports with or whatever it is. But it’s a very different dynamic. So it’s not that one’s better or worse.

Sam Corcos: And it works differently for different people. We have someone on our team who his most important thing is that he is at home so that he can have dinner with his family and he can read his daughters a bedtime story every night. That’s way more important than making new friends at work, and that’s fine. That’s not better or worse, it’s just a different set of preferences. Because we’ve been remote since the beginning, we haven’t had a lot of the same issues that other companies have had making this transition, because for a lot of people, they came in with a certain set of expectations and they were not fulfilled.

Sam Corcos: In our case, we haven’t really had that issue just because we started out as remote. I think also similarly, because we are a software company, the access to talent. There is no actual reason why you can’t work remotely effectively as a software developer. So the access to talent, it’s at least several orders of my magnitude bigger, if you can hire outside of just the Bay Area. If you can hire any person, we limit ourselves somewhat to basically California to Brazil time zones. We don’t necessarily limit that in terms of hiring, we do actually have, I think at least one person outside of that time zone, I think he’s in Portugal.

Sam Corcos: But we set the expectation that we are only going to build one company. One of the failure modes of remote is you end up building three different companies. The Americas, the Europe, the Asia, and building one company is hard. Building three is exponentially harder. Having that single time zone expectation, I think is a really important thing to set very early on.

Campbell Baron: In regards to the future of work, especially in the states, the world is opening back up, there’s a lot of talk about this, how do you see this going down? Especially, I assume that if you talk to 1,000 people a quarter, you must have had some conversation with other leaders at companies in regards to what their plans are. Let’s look at Tech as an industry, software. What is the general consensus from your perspective, in regards to what opening up looks like? Is remote something that’s going to stick around? Is it going to be hybrid from your, let’s say network?

Sam Corcos: I think remote is much more substantial, but I think Tech in particular is an industry where remote, it lends itself to remote work. Whereas things like retail, you can’t really do remote. There were a lot of job that you just can’t do remotely. Tech because you’re just pushing bits, you’re not pushing atoms, it’s a lot easier to solve for. I don’t think that a majority will stay remote. I think entropy trends towards co-located because it just feels easier and lower friction. A lot of the stuff, it’s about how people feel for decisions much less the than it’s about objective outputs.

Campbell Baron: Oh, totally.

Sam Corcos: An example, in fact, I talked to one of my teammates about this, Tom, were we were talking about how objectively it takes less time to write a strategy memo. It takes an hour to write a strategy memo that you can put in writing, you can send it to the whole team and now everyone’s on the same page. But it feels like it takes less time to have one-on-one conversations with 25 people for an hour.

Sam Corcos: Obviously, that took at least 25 times more effort. And also probably did not lead to the same level of alignments. Because each of those conversations is like playing a game of telephone but it feels easier. And so you have to balance these things. When you’re running a remote team, you have to make sure that everyone’s on the same page and it feels easier to do that when everyone’s in the same room.

Campbell Baron: No, absolutely. I agree with you. I think it works really well for specific of companies. I find that people have strong opinions about this and oftentimes, even though COVID has been a crazy change agent, the elastic band will not snap back all the way but I think it will snap back part of the way. You are absolutely right, it is a question that you can’t precisely answer because there’s so many moving variables. As we wrap up here, and I really appreciate your time, this is a wonderful conversation, do you consider Levels your life’s work or is this one of many projects?

Sam Corcos: It’s hard to know. There are a lot of types of problems that I want to positive effect that I probably won’t be able to do through Levels. I can list a handful of other major concepts but it certainly has the potential to be. Healthcare is, it’s already a double digit percentage of the U.S. economy and increasing every year, usually for bad reasons but it is definitely only increasing.

Sam Corcos: There’s potential that this is what I focus on for at least another decade. I think that there are a lot of other types of problems that maybe I solve through additional companies or through funding companies or through philanthropy or some other mechanism. But I definitely see this as one of many sets of problems that I’ll be addressing

Campbell Baron: And my last question for you is, what keeps you motivated? What’s the underlying force in the context of company building? Is it the prospects of doing well financially? Is it the prospects of building a large company? What is it?

Sam Corcos: Well, it’s probably not doing well financially. One of the consequences of being a digital nomad is I’m also pretty impressive minimalist. I think I’m down to at this point one pair of jeans and three t-shirts.

Campbell Baron: Interesting.

Sam Corcos: I was thinking about it. If I had a lot more money, I’d probably just stage more elaborate pranks on my friends. It’s probably what I would do with it. But I would say broadly speaking in my life, competition has been a big theme. Probably pathologically competitive. I would also say just doing things that I like doing and care about. I read books that I’m interested in, not because I feel like I need to read them for some particular reason. I like the feeling of progress towards major goals and milestones that are important to me. I’d say it’s largely an intrinsic motivation at the stage of my life.

Campbell Baron: Sam Corcos is the Co-founder and CEO of Levels Health. He joins this program from Los Angeles. Thanks for listening to this episode of The Ones Who Succeed. If you enjoy this show, you could leave us a review on Apple Podcast or tell a friend. That also helps new listeners discover the show and I appreciate it. You could find me on Twitter, Instagram and TikTok. I’m at Campbell J. Barron. You’ve made it to the end of the show. Thanks for listening. I’m Campbell Barron and we’ll see you next week.