Latest / Founder F**K ups / The Founder Commitment Gap with Lizzie Tan
Transcript
- Ben Bagg: Today's guest is Lizzy Tan, the co-founder of Cleave AI. When you're building a startup, especially in the early days, you're constantly selling the dream. You're asking people to take a leap of faith to leave comfortable jobs, to bet their careers on your vision. But Lizzy discovered a painful truth about early stage recruiting. You can't ask someone for their full commitment if you aren't willing to give them yours. After securing new funding for Cleve, she was scrambling to find a technical co-founder and she found a great candidate. But she was still kind of wrapping up her previous agency business. So she kind of went dark for a couple of weeks. And when they finally met, the candidate showed up fully prepared with next steps, passionate, while Lizzie showed up with just a few rough ideas. But contrast was glaring. She had asked him to bet his career on her, but she hadn't shown him the same level of respect in return. Today we're talking about the co-founder commitment gap and why busy is never an excuse to distribute someone's time and the hard lesson While you are assessing candidates, they are absolutely assessing you. Lizzie, welcome to the pot. Liz: Thank you, thank you so much. Wow, you gave such like a complex intro. I feel like you covered all the biggest points. I'll try my best to like, with more details. Ben Bagg: Thank you know, we've got to get into the story, right? You know, I think many people have made this mistake in the past or I guess at the time when you were looking for the CTO, you were also like wrapping up your agency. had a like a... Liz: Mm-hmm. Ben Bagg: You had a marketing agency, right? A personal branding agency. Why did you kind of feel like you could juggle both transitions at the same time? Did you kind of underestimate what Cleave required whilst you were still working on the other agency or yeah, was Yeah, what was going on? Liz: Okay, so How it started was we were running this agency for a few years. I think it was about four years in. And that was a time when AI was just starting. So we could see a lot of potential that we could apply AI into the work that we're already doing. Because fundamentally our work at the agency was understanding clients lot and just becoming their second brain and helping them create content in that sense. So we needed to absorb a lot of details about, so client A is like this, client B is like that. And when you have employees who come and go after a while, it becomes very difficult to manage all that. And clients sometimes they get upset that like I've already built a relationship with this employee, this employee knows all my details so well. Like how is it going to be possible for the next employee who comes in to understand me as well? So we had all these problems and when AI came out, we saw, this is a big opportunity that we can jump on. So then we applied to Microfather and I, we applied to this startup program and we got in. So it was like, okay, let's just like go with this and see how it goes. And then we spent three months building like a very early version of the idea. and a very simple product as well and we pitched that and somehow like we got funded so but we realized that the moment that we got funded we realized that this has to be a completely different entity it cannot be part of the agency so then Ben Bagg: Hmm. Liz: We basically landed on this dilemma where now we have an agency and now we have a startup and how are we to manage that? So then the plan that I came up with was always to move on from the agency, but we couldn't do that immediately because we had a lot of clients at the time. So the plan was to, okay, I'm going to find like some freelancers that can outsource my clients to and just work with them for a few months and eventually maybe they can just take over the clients. So that was always the plan. So then once the plan was put in place, then like I had to like start doing it. and that's when I realized, wow, okay, the agency has a lot of work to do if we were to get to that stage where I want it to be. able to hand it over or let it run on its own. So that's also the time where we got funded and we were so excited and we wanted to like find a CTO as soon as possible. And this CTO was meant to come in as a co-founder. So this CTO is not going to be like a hired CTO, it's going to be a co-founder. So it was a challenge from the start that we needed to find this person as soon as possible. And we needed to work with this person enough time to know that this person is someone we can work with for maybe like the next Ben Bagg: Go. Liz: 10 years if this startup takes off. So we did go on a frenzy like trying to find like different CTOs to talk to so we were doing that for a bit and I was also on the side managing like all the handlebar stuff like trying to build up a system such that the agency can fully run on its own. So the dilemma was really about like, I realized I couldn't really balance both at the same time as well as I thought it could. was only a lot of things going on and also coupled with the excitement of like, we got all this funding. Like we should just move really fast. And it's like a new business, like so much excitement. So then I guess that kind of went wrong down the path. Yeah, I guess that Ben Bagg: time out guys. Lots of you are watching, lots of you are learning from the founder fuckups that we've all gone through, but please do me one little teeny favour and subscribe so that we can keep growing the channel and get more great founders on. Back to the episode. Okay, quick Liz: I, yeah, yeah. Ben Bagg: question. You were trying to hand off the kind of agency for it to run itself. Has that totally closed down now or is it still running making it? Liz: Right now, yes. We've ceased operations. It's not closed down. We've ceased operations. And whatever clients we had, I've already fully handed over to the freelancers that have worked with us for a while. So some of them have managed to get really good results for them. So we just worked for a few months, and I handed over all of the knowledge about this client, and they just fully took it over. Yeah. Ben Bagg: So the original story, you had found a pretty cool looking technical co-founder, great candidate, you're quite excited to work with them. Walk us through that kind of specific meeting after that two weeks of silence, right? Where you were excited, but then you went dark. he comes to this meeting or he or she, I didn't, I'm not sure, they showed up to the meeting fully prepared and got a vision, they got next steps and you kind of show up with rough ideas. Like what was the feeling in the room? Like how did that kind of, how did that go when you kind of noticed that there's a massive gap in preparation for this event? Liz: So I guess the first mistake that we made was, I don't think, it's a he by the way, I don't think he's aware that we were speaking to multiple potential candidates at the time. So that was the first mistake that we made. We weren't very upfront about that. So we had a meeting with him and we felt that the energy was great. So then we shared with him the idea of what Cleve was. And at that time, we felt like he was... like one of the most promising candidates that we spoke to so far, but we did have a small concern that... maybe he wasn't as aligned with the vision that we have because he's not personally very interested in the full vision that we have. He's just more invested in the backend, how can he build this thing? So then we thought, hmm, okay, like maybe we could speak to a few more people. So that was like how we were at that time, which we did not communicate with him. So then after that, after we met up, we scheduled another meetup like two weeks from now to like go back and think about the idea. And then that was the time that I realized that, okay, there's so many things I need to be doing. And I was like, Ben Bagg: So. Liz: racing through everything without really thinking much about the meeting that we had. And then when I went back, what we saw was he brought his laptop and he had all these little documents where he was writing, okay, so you guys talk about this vision. So I started like planning a little bit. The first version of the product could look like this and that. It was not to the point where it's like fully ready, but you can tell, you can tell that he's already like spent some time thinking about it. like Michael Fodden and I, kind of just showed up with the idea still in our heads and yeah, so we weren't very prepared. Ben Bagg: Of course. Liz: So I guess it did take him back a little bit because when we last spoke with him what we said was like, this sounds like a really good thing, let's go and think about it and when we come back we can start working together and see how we feel and whether this relationship can go to the next level. So then when we came back we were pretty much still at the base stage. I guess that's where... What we should have communicated as well was that we were also assessing other candidates and we did have this mall concern on the back of our minds that maybe he's not very interested in the bigger vision. He's just more interested in joining a startup and he's a very good executioner, I would say. But at that time, the vision that we had was also content. We wanted to make content scalable. We wanted to make... make it a lot easier for people to create content for their own personal brands and stuff. And he's not someone who would see himself posting content online. So that was a small thing that we were thinking about that we did not communicate. Ben Bagg: And obviously at the time, although you had those concerns, you've gone into this meeting and you you guys are kind of half-assed it, you know, not, you've still got an idea that you raised capital, but you haven't really been thinking about it because you've been doing all these other things and you're kind of looking at other people, you know, you're kind of... Liz: Mm-hmm. Ben Bagg: What's the word when you're dating you're playing the field a little bit so you're not gonna put as much effort in and he comes in he's really you can tell he cares about it now like and And I guess you mentioned it kind of you told me it blew his confidence in you So did he communicate that you'd be good? Nah, you guys are just unprepared. Was it like a direct confrontation or or did you just feel the energy? Liz: Yeah. Ben Bagg: fall off from the three of you together after that experience. Liz: Hmm, he did, if I recall correctly, he did... He was upfront with us. He was very polite about it. That he was quite taken aback during the session itself when we were meeting him at a cafe. That, like he was expecting a little bit more preparation to have been done because that was what we communicated beforehand. Yeah, but he was polite about it. He was nice about it. And then after we went back, he gave us a call again. He still said that he wants to work together, but... Ben Bagg: you Liz: He did bring up the fact that I was expecting a little bit more, so I'm not sure if this relationship is the best for us. So he wanted to start off with a part-time basis instead. But this was something that he already mentioned beforehand, that he wasn't sure about quitting his job immediately, because I think he was in a pretty comfortable job. It was just that he was not, he didn't feel as challenged in the job. So he was kind of like looking outwards and this thought opportunity was interesting to him. So that was also when he was like very excitedly planning everything. But he, I don't think he really wanted to like, you know, immediately quit his job and jump into this. He always planned for it to be something more like a part-time thing. But after this experience, he was even more sure that like, I think I should start part-time with these two people who were not as dedicated as he seems. Yeah. So I guess like that, like, Ben Bagg: Yeah. Liz: hardened his decision, you know, so he was very firm on that. Like if we were to start on this, I want to start part-time first. I want to get a feel of how it feels to work with you guys first. And at that time, because we just got funding and everything and we would also have to report to investors, it was not feasible for us to work with someone who could only build the product part-time because at this time we did not really have a marketable product. And it meant that the CTO, whoever that is, will have to work day and night like... pushing out the products so that we have something to start market. So that was a tricky point. Ben Bagg: Yeah. You know everything happens for a reason as they say and I think you found a CTO co-founder who by the Outsider looking through the peephole everything looks amazing. You got a great relationship with your current CTO I think as founders we often use being busy as a shield sometimes a bit of an excuse Perhaps dropping the ball from time to time because that's basic Liz: So. Mm-hmm. Ben Bagg: This is why I have a podcast literally called Found the Fuck Ups. Welcome to the show. Looking back, how much of that silence of not talking to this potential prospect or not being focused on the new venture has poor prioritization or avoiding that hard work preparation? What do you think? Liz: Mm-hmm. Yeah. Ben Bagg: the big business is actually about. Liz: you think it's more like a matter of poor communication because when I look at it in hindsight, I still feel like it was best to tie up all the loose ends on the marketing agency side first so that I could go into this startup fully focused. That was always the intention. And I wouldn't want to try to balance both at the same time and just half-ass each one. Ben Bagg: Okay. Yeah. Liz: So looking back, think I still would have made the same decision, but I should definitely should have communicated way better on that. The moment I realized as well, because that was not something that I intended to do, but I was kind of like caught in the middle of it, but I did not communicate that. Ben Bagg: Yeah. Yeah. Liz: I guess I also had the mindset that I was kind of like window shopping around for CTOs. So I didn't take it as seriously, but in hindsight, this is such an important relationship because we're not looking for an employee. We're looking for a business partner to be with us for many years. So that kind of impression that I set off from the start was not great. Ben Bagg: Yeah. And look, bringing in a third party business partner has a lot of complications because you and Ashwin already have a pre-built co-founder relationship and a pre-built personal relationship. Meaning there's a high probability that you're on the same team. You coming in as the third party is incredibly Liz: Mm-hmm. Mm-hmm. Mm-hmm. Yeah. Yes. Ben Bagg: Difficult and challenging and it's exciting but it's scary as well and absolutely You know, you're doing a courtship and a complicated courtship at that like what you said earlier about that ten years I always talk about picking your co-founder is as important as picking your wife or husband Right because it's actually easier to get a divorce Like it's literally physically easier, right Liz: Yeah, yeah. Mm-hmm. Yes. That's Ben Bagg: get divorced and break up a business relationship, especially if the business is going okay. Right? Yeah. So I'm glad that you took a lesson from that. And I wonder how has that kind of that experience change your perspective on Liz: Mm-hmm. Yes, it got so complicated. Ben Bagg: recruitment in general, because I know that from what I've seen online, you've brought on a couple of people over the last year or so, like I think some interns and also a full-time, you know, a full-timer. You also brought on another CCO co-founder after the engagement with this one. Like how did that kind of shift your perspective on early stage hiring that experience? Liz: I would say the biggest one is being very honest with them from the start. Because I used to be someone who... I don't know, maybe I'm... I used to be a people pleaser, I guess. Like, I would want to make people feel comfortable. And I wouldn't want to, you know... Ben Bagg: Yeah. Liz: make them worry too much. Like, we're considering you. We might not get you. I did not want to be that kind of person. So I always want to make people feel comfortable, confident in the conversation that we had. So then I would tend to hold back some information. Yeah, or I will try to convey it in a very roundabout way that they might not have understood it. Yeah, that was one of the biggest weaknesses I had back then. But now when we hire, like you said, we hired a contractor and we also hired an intern. The contractor has been with us for probably about nine months now. Yeah, so the biggest thing is always to be very honest with them that this is what we expect. We also have this session, this is something that Ashwin started, but I think it's a really good practice, where we just ask them, what do you want out of this experience and what are your expectations? And we let them participate in this expectation-setting environment where we kind of be very upfront from day one that, okay, this is my boundaries, this is your boundaries, and... How can we work together on that? So I find that very helpful. I feel like it establishes trust pretty early on. And if anyone steps on each other's boundaries, then it's very easy to just go back and say that, we talked about this. This is my boundaries. Because we've already had a conversation before. So it becomes a lot easier to remind people that, just to remind you that I have these boundaries set up. And talked about this. And we agreed on that. So that's something I find really helpful. Ben Bagg: very Gen Z, very Gen Z, very Gen Z Madison style. Maybe millennials, I don't know. I like that and you kind of saying there's clear expectations, what you can, reasonably expect from me or do. How do you handle then communication? Because you said communication was made wrong. How do you handle that now when you're in a pretty overwhelming? Liz: Is it? I thought it was a... Something from millennials. Ben Bagg: stressful situation, maybe not stressful, but just like super packed, busy, intense. How do you handle that communication? Perhaps critical relationships now. Liz: This is a fascinating question because I feel like I'm also still figuring out and my team is definitely, all of us are Gen Zs I would say. Our work arrangement is a mix of physically in office and also virtually. Right now, these couple of weeks is more virtual, we're working most of the time. Ben Bagg: Yeah. Liz: And something I noticed about Gen Z, Gen Z's in general are like maybe it's just like the team members I work with who are both younger than me. they don't really like to text. They also don't really like to hop onto calls. So a lot of times they're kind of like independent contributors and they kind of just work on their own and then you get like once in a while updates. So that was something that was a little bit difficult for me to navigate at first, but was sort of getting used to it. We also talked to them about like, okay, guys, maybe we can have like a... every week since we're not meeting as often, we're not helping with proposals as often, we can just like send each other updates. And that's definitely changing, like they're proactively sending updates now, like I've worked on this this week, I'm stuck at this part. Yeah, so I would say like maybe for us Gen Zs, we don't need as much like... communication outside. I feel like we thrive in environments, I guess it's also my team because half of them are tech people who spend a lot of time looking at code, so they're not really having a chat open on the side. They're not really communicating with people all day long for their jobs. So their job is people just work on the code. So I realized that this is the environment that my team thrives in. cannot... Ben Bagg: Mmm. Liz: continuously observe the chat to see if there's any flats because they need to be hyper-focused on the code. So then we found this way of navigating where it's easier for us to work asynchronously. I think that's the word for it. Yeah. And we just send other updates. And if that's the environment that they work best in and we can find a workaround, then let's just do it like that. So that's currently how we work. Ben Bagg: Yep. It's very like everybody's kind of independent every now and then we're going to give each other updates but we're just working alone kind of quite siloed siloed but in a team somehow Liz: Mm-hmm. yeah. Not exactly silo. But most of the time it's very independent contribution kind of, and we meet every Monday. At the very least we'll meet on Mondays and usually when we meet it's really to like align the team and like discuss from our side, we'll talk about like, so we've met these different sales leads and what are the features that they need right now? What are the bugs that they discovered? And then they will bring in like, okay, so we launched this features and we need you guys to like test this out and see if it solves their problems and stuff like that. So we do a of that kind of stuff now on Mondays and for the rest of the week it's like independent work because fundamentally I feel like I spend more time in content and sales and they spend more time in coding so we don't really need to communicate every single day. Ben Bagg: And you found that, I imagine you found that quite challenging to go from a team that communicates quite a lot, works quite closely together to, we don't want to talk to you, we'll talk to you once a week, we just want to work. Liz: At first, yes, because I've never really had much opportunities working with agencies before this. Because in my marketing agency, most of the people I worked with were my clients who were mostly millennials. So then, they're a little bit more high touch points. Then we need to update them a lot of things. And then we have, I have calls with my clients back then more often than I have calls with my clients right now. Yeah, somehow it just works for us better that way because everyone's like so busy and like we don't really have things to update each other all the time. And a lot of the updates we want to have, we want to update each other can actually be done with like one message. Yeah, so that's how we do it now. Yeah. Ben Bagg: What do you do for relationships though? That's all about work and delivery and asynchronous updates, but what about the relationship within the team? Liz: Mm-hmm. That's an interesting question because we've been talking about wanting to go on an escape room together but that has never happened because we're all so busy but I would say like okay hmm I would say for all four of us, because there's four of us on the team, outside of work, we actually get pretty, we were actually pretty active also in the AI community. Like they like to join AI events for fun or they like to host AI events for fun. So then we also hang out that way. So like on the weekends, we'll hang out with these communities. Sometimes we'll join hackathons together and stuff like that. But the escape room needs to happen. Ben Bagg: Whilst we're on relationships, I want to ask you a personal relationship question. Liz: Mm-hmm. Ben Bagg: Your partner is also your co-founder, How does that relationship work? Because that must be quite challenging in itself, the work, life and relationship is all wrapped up into one when you're going to start up. Do you find it difficult to switch off? I think I remember watching a video of yours. You're very talented at making your videos. I always watch them when I see them on LinkedIn. And there was one where you were in China on a holiday. you're on holiday with your co-founder as well as your partner. And I'm just, I wonder how you... switch off and take that break when you're with someone you work so closely. Liz: Okay, this is a question that both of us get a lot. So I think until today, we've worked together probably for about six years, because we also started the marketing agency together. So I would say at this point, we definitely found a rhythm. But before that, there were definitely a lot of arguments. And I would say both of us are pretty. hit strong people when it comes to business ideas. So then we had a lot of arguments in that side. But it always helped to have a third person. So even in our marketing agency back then, there was always this third person who we worked very closely with. She was sort of like our HR person. She had multiple roles. but we would kind of go to her for most of the business decisions that we make, and the three of us would make it together. So then she would kind of be a middle person to... to both sides and then we of make a decision as a whole. And right now in Cleve, we also have the third person who is Rashad, our CTO, so it definitely helps a lot. But also over the years, we sort of like learn to work with each other's freedoms a lot better. And like you said, there's definitely times where it's very hard to switch off because when I want to switch off, he's probably working and vice versa as well. But we've already gotten pretty good at communicating each other and that like, okay, today I really want to switch off, maybe we can talk about that tomorrow. And the moment someone says that, then we're just like, okay, I'm just gonna work on it myself, then I'll just come back to you tomorrow. So over time, I would say it's definitely getting better. It definitely takes a lot of communication as well and being able to work together to make this easier, I would say. Yeah. Ben Bagg: Did it also make it challenging to find a third co-founder knowing that they were entering a business where it's a couple co-founder relationship? Because the one risk as an outsider coming in who knows nothing about your relationship, what if you broke up? And I've invested two years of my life into this business. You break up and boom, we just explode. That's certainly a risk. How did you kind of combat? Liz: Mm-hmm. Yeah. Mm-mm. Ben Bagg: profound a hiring recruitment conversation. Liz: Yeah. Yeah. In terms of hiring, I would say like most people who come in as employees don't really mind it as much. But when we were looking for a co-founder, I made it a point to tell them that like, you might want to consider that we're also a couple and like, I don't know, like there might be situations where you need to make board decisions and you have to know that like we're probably like... our percentage adds up together, know, that kind of stuff. So I was very upfront with them in the start that like we don't do this kind of stuff, but like, of course, like it's just me saying. So yeah, yeah. So there were definitely people who minded. But when we spoke to Russia, he was like, nah, I don't care. Like, I know, like it's fine. Yeah. So yeah, kind of like how it happened. Ben Bagg: It could happen. Feasibly. you Okay, I would I would be concerned, but I'm glad that six years of running businesses together, you've managed to to kind of iron out the kinks figure out what works for you guys to find a great co founder to build a really cool, interesting business. I think you guys are doing some cool and exciting things. And I really wish you both or three of you a lot of Liz: Mm-hmm. Ben Bagg: luck and success. For the founders who are listening who want to avoid making the same fuck up that you did and maybe they have been running an agency on the side but they're building a product like many people are these days and they're looking for a technical co-founder, what do think they can do to avoid making the same mistakes when they're trying to juggle all of this stuff all at once? Liz: Thank you. I think most of your problems can be solved by just communicating with people. I feel like a lot of times we're scared to communicate because we feel like if we say this we might be at a disadvantage. If I told the person that I'm also considering other candidates then they might feel offended and don't want to work with us. We might have these kind of fears so then we tend to hold back information but it's actually better for both parties if you work. Ben Bagg: and Liz: honest from the start because if that person could not accept this from the the get-go then like this is going to be a business partnership like for so many years and you want to be able to work with someone that you can be honest with 100 % of the time without having to worry about their responses otherwise like you're stuck in this for so long yeah so that's that's something I would say. Ben Bagg: So don't bullshit people and honesty is the best policy. Okay, I like it. Liz, thank you so much for coming on the pod. Liz: Yeah. Definitely. Thank you for having me.