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Founded and Funded: The Whys and Hows of (Diverse) Team Building with Founder Justin Beals of Strike Graph


Strike Graph, a company started by two tech guys, and funded in mid 2020 with just an intern, is now growing and serving customers.  It is also two thirds women or gender diverse.  The road to getting there was clear to CEO Justin Beals before he even incorporated.  In this deep conversation with Hope Cochran and Elisa La Cava, Justin talks about the whys and how he set out to build his company this way and what this has meant for their success as a team.

 

Transcript (this is machine driven transcription so expect some typos)

Erika Shaffer: [00:00:00] Welcome to Founded and Funded. I’m Erika Shaffer with Madrona Venture Group. Hope Cochran and Elisa La Cava sat down with serial founder, Justin Beals, to talk about how he set out with intentionality to build the Strike Graph team from scratch to honor and promote diversity. Justin has seen from past experience, with other startups, that diversity of backgrounds and of thought promote a unique team environment that everyone can own and feel a part of.

We all know how being part of a team working toward a common goal is a powerful element of both enjoying work and being successful. Strike Graph received seed funding from Madrona in mid-2020 and was a Madrona Venture Labs incubated company.

I’m sure you will enjoy this discussion of team building and how to find the people who will propel you to growth.

Hope Cochran: [00:00:57] Hello. Today, Elisa and I are here with our friend, Justin Beals. We have been able to work with him over the past year or so as the CEO of Strike Graph. And have been inspired by him along the way, so it is great to start today off with a conversation with Justin. Justin is the CEO of Strike Graph.

Strike Graph is a security compliance company. A software solution that enables your customer to prepare, obtain, and then maintain their security certificates. Having the SOC two certification, for example, can help your customer sales cycle go faster by removing the security concern from their software.

But this isn’t Justin’s first rodeo as a CEO or product expert. He has an impressive career building companies from the ground up with Roundbox Global, that he founded and grew. He focused on the ed-tech space. And then later became the CTO of Koru that applied machine learning and leading assessment science to measure the things that matter most to the employee performance.

But what is inspiring and clear as you get to know Justin is that he approaches everything thoughtfully and with intention. One of the clear intentions that he set is to create a culture and employee base of talented and diverse individuals. And his views are not that this is just an important thing to do, but it is a key element of the success of building a high functioning company.

This is not something that happened overnight, as he will tell you, but with decades of focusing and working on it. Currently at his company Strike Graph, he has built a team, one that I am proud and love working with, that is two thirds women and are gender diverse. And this is not just in the traditional areas of marketing and HR, but 55% of his engineering team identify as female and 30% of color.

What I love to see is that I get to work with them. I don’t think, oh, this is a female CTO. I think this is a talented individual who’s getting stuff done. The team is full of talent, grit, and a focus on completing things. And one that I love to work with. So welcome Justin.

Justin Beals: [00:03:11] Thanks Hope. And thanks, Elisa, I’m really glad to join today.

Hope Cochran: [00:03:15] Before we jump into the topic at hand, you have become an amazing leader. And I would just love to hear about your leadership philosophy that I know you’ve honed in over time.

Justin Beals: [00:03:25] Sure. I was given the opportunity. I think that’s the way my family would have described it. I would have called it the chore of being a leadership or supporting in leadership from a really young age in their community, the religious community. And so, I hated every second of it, but I was the one that went every Sunday. And so, you wind up being the one, the troop leader for boy Scouts. I and I’m lucky in a way that I’ve gotten a chance to really go through the painful process of learning something about it and the time to do that. My philosophy is really service leadership.

I know that’s a hot phrase right now, and it’s maybe hard to define, but through just the experience of trying to be successful as a team, what you realize is that a leadership role is always in service. You’re in service of your colleagues, you’re in service of your customer. You’re in service of the mission of the organization.

And you have to set the right example. That example is the leadership that people need to see, and it doesn’t come across as dictatorial. Often times it comes across as doing the work side by side with the team and showing that you’re also not afraid to get engaged and get involved. The art of my philosophy of leadership is that it’s very hard to manage the balance between your self-confidence, like I can go and be a leader I can accomplish this thing, or we can, and as well have this really intense humility. This ability to be constantly open, aware, and listening, confronted with the challenges, taking on the hardest parts of the problems that your team is encountering. And so, it’s not an easy role to play and it requires immense strength, like just, the thing I grapple with on a daily basis is knowing like, not micro-managing my teammates, giving them the freedom to do what they need to do, but also know when it’s time to take a decision. Because for the team to effectively meet their goals, they need a clear direction.

Yeah.

Elisa La Cava: [00:05:34] I’m so excited to be here, Justin. This is Elisa It’s so interesting, I, another way you’re setting an example and kind of building this strong team. I remember at a board meeting recently; we were all talking about how quickly the team has grown in the past few months. And your response to that was I’m really big on building habits.

And I thought that was a really interesting thing to say. And I’d just love for you to elaborate. What do you mean by building habits or specifically what habits are you helping cement in your team at a foundational level, given how quickly you’re growing and some of your leadership philosophy?

Justin Beals: [00:06:07] Yeah, this is probably some of me coping with my own inadequacies, but I find it very hard to build like a super long-term strategy, way out in the future and yet not have an incremental and effective method of reaching there. You have to climb the ladder, you have to climb the mountain and you’re not going to get there by imagining what the top looks like, but by putting one step in front of the other and you almost have to forget or be able to let go of that larger end goal to work in the increments. One of the challenges in engineering is really scoping the time it takes to deliver something. And the number one thing you can change about being precise in your prediction is reducing the amount of time or amount of work you’re scoping. So, it’s these incremental habits that matter. In our company and especially with COVID, the daily standup is critical.  I need to show up, and this is my opportunity, to that leadership question, to show what I’m working on alongside my team with them.

But then a regular planning meeting once a week is critical and it’s always on the books and we always show up and it may not be the best planning meeting.  We maybe could improve the rigor with which we do it. But the fact that we can have that habit on a regular basis is critical.

And then it comes down to even communication styles, being clear and transparent as a habit. And the feedback, as a habit, is critical as well, because otherwise we’re not getting that loop going where we’re learning and improving.

Elisa La Cava: [00:07:42] I love it. It’s so exciting seeing your team work together from our vantage point. And one thing I’ve also noticed when we have our meetings together. If it starts at 8:00 AM, every single person is online, video on, ready to go at eight, like on the dot, and you are like, we are starting the meeting and it’s like full jumping in as a full team, every single time, fully prepared.

And I think that’s so incredibly impressive and a testament to how coordinated the leadership team is. And in being productive and working together and getting to the point and making those plans and probably making the most of your daily stand-ups as well.

Justin Beals: [00:08:20] Recognizing that example, right, Elisa, that you set, like if I’m there five minutes before the meeting starts, I find my team shows up too.

Elisa La Cava: [00:08:31] So my next question is flipping this on its head, Justin. And you are a CEO now you have been in leadership roles at companies for a very long period of your career. But thinking about the moment leading up to being CEO and founder of your own company who is someone, in your career journey who has inspired you, inspired your leadership philosophies and someone who or even, a peer or mentor who’s helped you hone those capabilities since you’ve founded Strike Graph.

Justin Beals: [00:09:02] Yeah, I think that’s a great question.  One thing I wouldn’t say is that I’ve been super inspired by the business world, necessarily. I really appreciate the achievements of Steve Jobs or Elon Musk, but I have my criticisms as well. It goes both ways. I think more when I think about as a community of inspiration, it’s really the inventors and the scientists of the world that I find affinity for my motivations with. I really believe that the best part of living is in the boundaries.  The boundaries of what you think you’re capable of, the boundaries of the relationships that we live in, and exploring those, and what we know about the world around us. And those individuals that are a little unafraid to question and lean in and test those boundaries are learning and living at the edge of their own context.

It’s really exciting and amazing. I think that I’ve had people along the way that certainly inspired immense confidence that I didn’t have. The first person to ever give me a contract at Roundbox Global for more than a hundred thousand dollars was a gentleman named Troy Viss. And he was a creative director at McGraw Hill, and he believed in me and no one else did. He thought I could get it done.

He actually baked our services company, Roundbox Global, off of a really massive services company and we won the contract. And that little moment with Troy, was an immense confidence boost. And all of us probably have those stories where someone that didn’t have to believe in us believed in us a little bit and gave us a chance and our whole world changed.

And I hope I’m doing that every day for my teammates. I hope that I’m giving them the opportunity to fail, but the confidence to go try.

Hope Cochran: [00:10:57] That’s really inspiring, Justin. And, as you think about giving them the confidence to try, you have really built a unique team and I see it firsthand at Strike Graph, but I know that this is your at least third time. This is not new for you. This is, as Elisa pointed out, a habit that you have formed. I’ve also, you and I have also talked about the fact that building this diverse team is vital to the outcome of the business.

And that you think that it’s an important element of a successful business outcome. So, I would love to hear from you why you think that’s such an important element to the outcome of the company.

Justin Beals: [00:11:36] The reason that this is so important for a startup, especially, but in any new venture. I think even if you’re in a large organization and you have an internal startup, you’re starting a new team, now you’re going after a new initiative, is that you want that group of individuals to bond around a new identity.

What we do is a team sport. When we build product, as we build an organization, that’s delivering a service, as we put together a marketing plan, that’s all collaboration, that’s all team driven. And for it to be successful, it has to operate that way. But you need a team identity to belong to, to negotiate that collaboration. And if the identity of the team is homogenous because they all come from the same background, you wind up not being able to bring a unique identity but living by the identity that homogenous environment brings. And so, when I want to build Strike Graph, Strike Graph is going to provide a unique service and it needs to differentiate itself and its teammates need to feel differentiated themselves from the other teams that they’re competing against.

So that’s why I think bringing in a diverse team gives me the opportunity and that team to craft their own identity. And so that’s critical in a startup space. The second thing that happens a lot when you build a diverse team, is that when you bring a group of people from a diverse set of backgrounds together, they actually tend to drop off the bad habits of their specific cultural affects or backgrounds.

They can build new, good habits around the new identity. And so, it’s a liberating opportunity to leave your bad habits behind and bring good new habits or your better habits to the larger team. And so, diversity diminishes the opportunity of one cultural or specific set of experiences driving that group identity or those group habits.

And really, it’s all about effective collaboration. That’s both to efficient collaboration, like how can we efficiently reach a decision as a team, and effective, like how can we reach the best decision as a team? And optimizing for both of those requires having your own identity and mission clearly understood and then leaving behind the old habits, so you can create the new effective ones for crafting the right next solution to build, the right next marketing message, the right next demo for a product.

Hope Cochran: [00:14:16] That’s wonderful. And one of your first roles as CEO that you chose yourself was building Roundbox. And you often refer back to that and say people were my product. And I actually feel that way in all companies today, people are our product because software is one thing, but it’s only created by the talent and the people around us.

You had a drive to create that environment and to create that company and to bring those people together. What was that drive that you had, as you set out to build Roundbox?  What inspired that?

Justin Beals: [00:14:55] Yeah. I think the inspiration to build a company was a little twofold. One, is that I wanted to build a tribe, a group of people that I really enjoyed working around and I had some jobs that weren’t great, or some cultures that weren’t very accepting and thought there’s got to be a more collaborative, beautiful way to work every day. And really just set on the path to find that. Another factor that affected it is, my college degree is actually in theater, and to me a start-up is very much like putting a play on. And so, you get this crazy cast of characters together, you have an idea of this production, you’ve got to put on, there’s a deadline, you’ve got to launch it on the server and then you suffer the financial outcomes of your goals.

And I loved that habit.

Hope Cochran: [00:15:42] I have to just interject here that you and I have this in common because my degree is in music. And I always say that music is what I use every day, not my econ degree for the exact same reasons. Practice makes perfect. Bringing a diverse group of people together and trying to unify them and put something on is an incredible challenge.

And these are the skills that I use every day. So, I love that we bring this similar philosophy to the workplace.

Justin Beals: [00:16:09] There’s a joy in sharing, Hope. Sharing yourself, sharing of someone else, getting it back and forth. It’s, it’s enlivening. Yeah. Roundbox, specifically, was an interesting journey. I had a number of failures and this was the next kind of iteration of trying to found a company. I didn’t really have access to capital, it wasn’t my background or a community at the time. And so, we had to bootstrap it, which means that services company almost always. I really think that most founders should go through one bootstrapping experience of a business. There’s no better teacher of what is necessary from nice to have than having immediate financial issues as you roll out your company.

And so, it’s a great training ground. The other thing though, is as a services business, you’re billing a customer for every hour an engineer spends working on their software and they’re really communicating to you a vision of what they want to change about their company or the product for their customers.

And you’ve got to connect those things. I think it’s liberating to really perceive a company so precisely as the people that do the work are the product that we deliver. There’s a disintermediation in the enterprise SaaS sometimes, where you’re like, oh we hire great people to build a product, but we don’t talk to them that much, or as little as possible, so we can afford to charge as cheaply as we do. But it is a critical day-to-day understanding of the people working on the projects.

So, I remember having this really interesting conversation with our, one of our software development centers in San Jose, Costa Rica. And I was speaking with about 90 engineers at an all hands for Roundbox. And I remember telling them that, while we produce code, while we manage massive software systems for enterprise education delivery, and we really support incredibly complex technology. Our true business, the work that team is engaged in is relationships. It’s our relationships with our customers that had to be healthy for Roundbox to be successful and grow as rapidly as it did. And if those relationships aren’t healthy, there’s no chance of us having an effective delivery. And so I told them we’re in the relationship business, not the technology services business.

Elisa La Cava: [00:18:33] So Justin, one thing I’d love to do is talk about team building again, because I think that’s such an incredible topic. Many people and leaders struggle with sourcing unique and diverse candidates.

And we all know when you have limited capital resources each head count is vital. And what I think is notable is in the period that you founded Strike Graph, over the past year or so, you’ve gone from zero to 22 employees, notably two thirds of your company is women or gender diverse. And overall, you have 30% people of color.

This is an incredibly diverse and talented team. And I think one thing a lot of people struggle with is achieving these kinds of goals as fast and as intentionally and as successfully as you have. And so maybe you can share with everyone what’s one of your secrets. How do you find these people?

Where do you go to source candidates like this for your company?

Justin Beals: [00:19:28] Yeah. As you say it, Elisa, I’m really proud, actually. The accomplishments and putting together such a diverse team really comes from the team itself. So, I want to laud praise on their shoulders cause it’s not just me that achieves that, that outcome. But what was important, for me as the CEO and founder in getting there is the first three hires are a critical decision.

And I think this is true, no matter what outcome you’re optimizing for in your team building, because those first three hires are going to make critical opportunities for the next 30 for the next 60 and the next 90.  Think about them. I build in my mind a model of the perfect candidate – for the role, that first role, our first CTO, our first VP of sales, our first head of customer success – and it’s not just, I want five years of customer success experience, or I want someone that has been an engineer for 15 years. It’s actually, I wonder if they would have experience in this type of architecture, or I wonder if they have a deep interest in the psychology of customer purchases.

One time I made a hire of a PhD to a computer science position, a software developer position, because we were doing research into the scientific area that they came from. And even though they wanted to be a software developer, I was looking for that third, fourth, fifth skillset that they came with.

And you’re playing Moneyball, with talent, you want six different things that they’re capable of doing. One of those things that you want is a diverse cultural background. That diverse cultural background brings different types of experiences and different ways of thinking and pushes that three-person collaboration, because that three-person collaboration is how the next group of people, as you scale up, are going to collaborate.

They are setting the tone, the deep-seated cultural architecture of everything that will follow. Pragmatically, just to go find them and get them on board. Once I’ve got in my head who that perfect candidate is, I go search them on LinkedIn. And I am known for finding three or four people and writing them a direct message from the CEO and saying, I think you’re a perfect candidate for us.

I haven’t posted a job description, but you have these skillsets, and they are exactly what the problems we are trying to solve. I think you would get great joy out of solving those problems with us. And typically, I send three messages out and somebody responds, and we go through an interview process and it’s been incredibly successful.

The other thing I think, Elisa, is this is why networks matter. This is why your long-term business relationships matter. Because I can tell you that I started recruiting the first three hires for Strike Graph before we ever incorporated Strike Graph. I had meetings with them, I told them what I was working on, I talked about the types of things that we would like to build, I gathered their feedback and interest and I tracked them the whole way.

Elisa La Cava: [00:22:47] I love that.  I also wanted to touch base on another point you’ve made before about looking for people in candidates who want to join your company, who are reaching up.

Can you tell us a bit more about what you mean by that?

Justin Beals: [00:23:01] Absolutely. I think that’s one of the critical traits for any startup that you’ve got to look for. When you find someone that has been overlooked, for whatever reason, the color of their skin, the gender, diminished or demeaned from typical communities that they might work in, you’re finding someone that wants to achieve, but no one has unlocked their ability to go and see what they can do. You want to give them an opportunity to operate within their boundary. And that’s your job as a CEO is to unblock the talent to deliver everything they can. Not to tell them what to do, but to give them the best opportunity to even outsize the deliverable that you expected of them.

And so that grit, it’s really important to me. And I think that nontraditional candidates are a great way to source that grit, because if they are exhibiting courage, to go and try, they just need a vehicle to travel in. And a startup is that because the one thing a startup can give employees is an opportunity to grow quickly and opportunity to work on new problems and opportunity to do things that, bigger company might have more clearly delineated in roles. And when I have a developer that says I’m interested in dev ops, I’m like, great. We have a lot of dev ops problems. You can get a chance to grow in that way.

Hope Cochran: [00:24:32] Justin, I love this concept of unlocking their potential and finding people who want to reach up, but just haven’t had that opportunity. You and I have talked about some of the ways that you find these candidates. And you’re very intentional about looking for them. Can you walk us through some of the ways you’ve done that? It doesn’t happen by accident.

Justin Beals: [00:24:57] Yeah. So, I think the first step is to understand the context that you’re operating in. So, for example, with Roundbox sometimes we operated in new international contexts – Chile or Costa Rica. And so, geography was a really important limiter to what we were looking for. When you understand the limitations of your sourcing or who you’re going to hire, i.e.., they need to be in the Seattle area or it can be more international or they need to have at least this baseline certification, then you can start to get very creative about where you source it from.

And you need to understand that you’re competing for talent. You’re buying talent, you’re competing for their interest in you, their ability to come work for you and you need to go find them. Now, if you buy the most expensive talent possible, as it gets more expensive, I find there is more and more variation in the actual success of that talent when you bring them on board. But if you look for the places where others are overlooking talent, you will find amazing, talented individuals that are looking for a real opportunity to do that reach up, to climb a ladder, to learn more and grow. And so, I tend to find the educational institutions that are in the area, that are teaching the types of skills we need as a baseline, but are reaching into lesser served communities, people of color, historically black colleges and universities. My own college, Fort Lewis College had an attendance of 30% first nations, native American population. It’s great environments like that.

And here in Seattle I’ve worked closely with the ADA Academy, which focuses on women in coding. And so, these are just really exceptional educational institutions. The talent is high class. I spent time learning about these educational institutions so I could rely on what the students learn, and they’re just an amazing source of talent through and through. That’s that exponential effect because once you bring in one person from the local community college, new graduates are coming out all the time and interested in the opportunity that they’ve seen someone else achieve.

Hope Cochran: [00:27:06] Yeah. I just want to emphasize Justin cause it’s something that I’ve been so impressed by in working with you. When you started Strike Graph, you didn’t say, hey, I’m going to go check out this college and form a relationship, you had formed that knowledge and relationship with those institutions’ years ago.

This is a process. This is not something that just happened because you decided one day that you needed candidates. You have been working with ADA now for years. And as a result, we have some amazingly talented engineers in your organization as a result of that relationship. Same with the colleges, you know where to go because you have done the background work. I just think that’s so impressive. This doesn’t happen opportunistically or by mistake, it was with well laid plans, so congrats to you on that. I think in general, one thing we can’t overlook is you have built this company during the time of lockdown and COVID. And we all talk about how bringing on new hires during COVID has been the challenge.

Your entire company has been new hires and you have built an entire company during this period. So, as you have brought together this amazingly talented and diverse group, can you talk a little bit about also the challenges of doing this in this unique time period?

Justin Beals: [00:28:29] Sure. I’d be happy to. With compassion, this is a really hard time. And one thing, when I’ve been knocked down in business, it’s generally been something chaotic that I never could have predicted happening. And this is chaos in a lot of ways. And I want to respect that I’ve talked to colleagues that have had a horrible year in business.

It’s been really awful. And colleagues that have been very successful because of the chaos. And it’s very hard to predict. I will say that I started Roundbox in 2000 when the internet, no one liked it much anymore. It’s actually a little bit liberating to start a company in some form of downturn or crisis because you can grow as everything starts coming back, which is helpful.

You’ve mentioned the network being really valuable and it is probably my greatest pride, is all the amazing people that I’ve had a chance to work with and learn with, and the future opportunities that I want to create to work with them again, if I’m not already. That network was super important to getting a company off the ground with COVID. And I think, and I’m not sure if this has been your perception, that talent is looking in this COVID time for a team that they can work with and rely on since they can’t go to the office as well. And so, the, their networks have been more valuable to them in selecting a new position or looking for a new opportunity. And I took advantage of that, of course in building a strong team ourselves. Those habits that we mentioned daily, stand up. Planning meeting, writing tickets in our JIRA board, making sure that we’re keeping each other healthy and on track. It is, I think also critical in, in these COVID times. And then the final one is you have to express an outsized empathy. I used to say, a lot of remote teammates over the years, I used to say that you need go see each other every quarter to humanize each other again. So even though you’re on the phone, you remember that you’re talking to a person on the other line and even I get off base with that. It’s hard to remember the humaneness that, that we need to engage each other with when it’s just over a phone or video. We can’t do that now.

And we can’t make those physical connections. And so, I’ve intentionally tried to have moments with all our teammates that are not about work, but just about life. So, we can connect over the water cooler and continue to build a human relationship. Something beyond just the work that we do and enjoy each other in that way as well.

Hope Cochran: [00:31:10] Thank you. Justin, every time I work with you interact with you, I’m inspired. I’m excited to build this company with you. I’m excited to have that opportunity. And I’m just excited about what we’re going after together. So, thank you for letting Elisa and I be part of your journey.

Justin Beals: [00:31:30] Hope and Elisa and Madrona Venture Group and Madrona Venture Labs, our incubator, I have grown over the last year immensely, so I am not static in this process, as well, and all of you have been critical mentors for me, and I’m eternally grateful just for the opportunity to work alongside you and to achieve some success in and go after the next boundary.

Elisa La Cava: [00:31:53] Thank you, Justin.

Erika Shaffer: [00:31:57] Thanks for joining us for Founded and Funded. I hope you enjoyed this episode.

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