Fresh Off IPO, Upstart’s CEO Shares Why the Startup Isn’t a Typical Success Story
Starting Up

Fresh Off IPO, Upstart’s CEO Shares Why the Startup Isn’t a Typical Success Story

Upstart was founded by three individuals who barely knew each other, was forced to make a company-saving pivot, and flew under the radar in Silicon Valley for the past 8 years — but this once-scrappy startup just went public.

Last week, Upstart debuted on Nasdaq, joining the ranks of tech startups that have pushed past their life expectancy, beaten the odds, netted a great outcome, survived the growing pains — we could keep going with the metaphors, but we'll stop there.

CEO Dave Girouard is quick to note that the long-awaited IPO is neither a capstone nor a feather in his cap, but rather a milestone on a journey with plenty of road still ahead. "We're sitting here at a moment in time, and it's sort of worked to date, but without doubt, it's always a work in progress, and I'm not here to wave a victory flag whatsoever," he says.

That's Girouard's signature streak of humility on display. But after eight years of building, he and his team have much to take pride in — they've built an AI-powered platform that's transacted over 600,000 personal loans, expanded into auto loans, turned a profit in the first nine months of 2020, grown into a nearly 500-person strong organization spanning two offices, and yes, achieved that coveted IPO exit that so few startups live to see.

While Upstart flew somewhat under the Silicon Valley radar for nearly a decade (more on that later), Girouard should be a familiar face for Review readers. He's gone into detail about how to "challenge the when" and make speed a cornerstone of your company. He's weighed in on the difficulties of evaluating and providing feedback to executives. And just this summer, he penned a guide to help founders sharpen their writing skills.

Today he's here to tell a different tale — the inside story of how Upstart got built. It's one about dedication to the long game and sustaining focus year after year — and here at First Round, we've had front-row seats as it's played out. After investing in Upstart's seed round back in 2012 and later leading their Series A, we can say with confidence that Girouard is one of the most tenacious founders we've ever backed.

But in some ways, both Girouard and the company don't fit the typical startup mold. Upstart isn't the kind of company that grabbed headlines or shored up a sexy brand. With the wonkiest tech and fundraising hurdles, the team spent nearly a decade quietly building in a space people have been skeptical of — not the material that you typically see in unicorn tales.

As for Girouard himself, on the one hand, he's a tech veteran with a deep bench of experience at the likes of Google and Apple. On the other hand, he stood out in Silicon Valley when he started Upstart at the age of 46 alongside his younger co-founders Anna Counselman and Paul Gu (whose parents happen to be younger than Girouard is). And this trio of co-founders itself is also unusual — after a somewhat random pairing, they've stayed together from founding through IPO.

We're grateful for the chance to partner with this team on their amazing, if sometimes winding, journey — and we're especially appreciative that Girouard carved out time in a flurry of post-IPO activity to sit down with us and reflect on his takeaways from Upstart's incredible trajectory.

In this exclusive interview, Girouard shares an inside look at why Upstart worked and what other startups can learn from its early days, from the initial idea and how they pulled off a pivot, to thoughts on why — as he puts it — he "sucked at fundraising." He also delves into his perspective on the CEO's role, including how to assemble an executive team and what he learned and needed to unlearn from his time at Google. From his "Are you Airbnb or PayPal?" test, to his philosophy of "management by exception" and the four mental models he leans on, Girouard's frameworks are invaluable for startup leaders across the spectrum.

Fair warning — this makes for a long read, but we think it offers a unique opportunity to pick the brain of a founder fresh off of taking his company public. With hopes that early-stage teams will find plenty of wisdom in this tactical accounting of how Upstart got built, let's dive in.


Before he even started Upstart, Girouard had forged an impressive career. After leaving the world of consulting behind, he became a product manager at Apple (pre-Steve Jobs' return), gained formative startup experience at Virage (which took a stab at image recognition software in the dot-com era), all before arriving at Google in 2004.

Over an eight-year stint at the tech giant, Girouard scaled the enterprise apps division to its first billion dollars, which included everything from figuring out the "yellow box" of Google Search Appliance to turning Gmail, Google Docs, and Google Calendar into a suite of products.

But the itch to build a company of his own remained. Even though all the key details remained fuzzy, in 2012, Girouard struck out on his own. Here, he shares how he thought about taking the leap and how he linked up with his two co-founders.

Pinpoint your motivation and put on landscape mode.

Leaving Google meant walking away from a lot, Girouard says. But after leaning on some key advice he'd received earlier in his career, he took the leap.

"Somebody once told me to look at your life in landscape mode. And it's something I've really taken to," he says. "As you go from left to right, there are big parts of your life. It's a period of time, and it means something to you, but no matter what it is, at some point, you have to put a bow on it and go on to the next one. That's what Google was for me. I got to start what became Google Cloud and build it for quite a while. I thought another five to 10 years could be incredible and certainly would have been lucrative. But I only live once — and is this the last great thing I'm going to do with myself? As someone who built a career in Silicon Valley, I was 46 years old and had never started my own company, which was an experience, frankly, that I wanted."

Life's a linear game and you only have so much time.

Another personal challenge motivated this choice. "I had done reasonably well at Google and built a pretty successful part of the company there, but I didn't quite know whether it was me or whether it was because the Google mojo was so strong," says Girouard.

"You could argue that a monkey could have built what I built there because the company had so much strength to it. So of course, I questioned that myself — could I build something with a billion dollars in revenue or more, without the Google pixie dust around me?"

Find harmony with your co-founders.

Girouard started by quietly exploring the idea that would become Upstart while still at Google. But he quickly found that the process of finding a co-founder was tough going. "I was talking to all sorts of friends — some at Google, some outside of the company — about both, 'Is this something I should do?' and, 'By chance, would you ever consider joining me in doing this?' And man, the number of people who said 'Sounds interesting, but no, thank you,' definitely put me through this period of, 'Wow, am I the only one who thinks this is cool?'"

With an idea in sight and the company incorporated, Girouard opted to resign to pursue his idea more fully — without any co-founders. Then his fortunes changed. "Right when I left, I got introduced to Paul. We got on the phone, and he was this kid in New York who was building something similar to what I was thinking about. I knew he was in Peter Thiel's 20 under 20 fellowship, but I remember he was telling me about how his parents came from China, and I was asking how old they were, and I had the realization of, 'Oh my God, I'm older than your parents,'" says Girouard. "He emailed his whole model to me, which was an Excel macro. And I remember thinking, 'Wow, this guy must trust me. Then on a Friday, he flew out to hang out with me for half a day to figure out if we could work together — and he ended up flying back to New York and coming back with his possessions on Monday."

Meeting his other co-founder was similarly serendipitous. "As I was leaving Google, Anna, who worked on my team, came by a conference room to say goodbye to me. She was like, 'Oh, I loved working for you. It was fun.' I didn't really know her that well, honestly. And she said, 'What are you going to do?' I explained my idea, and she said, 'That's awesome,' which was unlike the other reactions I was getting," says Girouard. "Fast forward two weeks, and Paul, Anna and I are sitting in a conference room at Google Ventures."

Upstart co-founders Paul Gu, Anna Counselman, and Dave Girouard

Now almost nine years on, this trio is still together. Given the absence of a long courtship, Girouard reflects on why the founding team clicked. A sizable dollop of luck made it all work, he says. "As different as we were, we were just appreciative and accommodating enough to make it all work. That's not to say we don't rub each other the wrong way ever, but rather that we're very complementary," he says.

"Anna will always think of things that I'll forget to do. Paul will have a true North, seek-the-truth approach. And I'm the execution guy. I'm always asking, 'Why aren't we doing this now?' or probing us to push forward and reconsider. And it's added up to what amounts to a well-balanced company. We didn't plan that because obviously, we didn't think too hard through it before we decided to work together."

If you were a betting person, you would have never bet that this would all work out. Three people coming together on the spot and deciding to build a company usually isn't a recipe for success, but here we are almost nine years later.

Setting kismet and their differences aside, Girouard boils down the other ingredients that made them a successful founding team:

  • Clear-cut roles. "I had assembled the team and gotten the company seed funded. It was pretty clear that I was the CEO. Paul was the data science guru and the technology guy. Anna was a super-strong operational person. And it hasn't really changed from the earliest days," says Girouard. "We now have an SVP of engineering who works for me. Paul's leading the data science and product teams. Anna runs all the operations as well as People Ops. Perhaps other founding teams might have more similar people who arbitrarily decided how to split up things based on how they felt that day, which might be how that turns into a conflict. But in our case, figuring out who's responsible for what has been quite natural."
  • Regular maintenance. As for how that relationship has been maintained over nearly a decade, Girouard swears it's the simple stuff. "First and foremost is this very regular check-in. The three of us would always try to get out, either at our Palo Alto coffee shop or just going on walks. These meetings don't have specific agendas, and we're not trying to cover a laundry list of things that are too in the weeds," he says. "Rather, we're trying to get a sense of where everybody is — how we're feeling, what's important, and what's worrying us. What are the things we think the company could be missing or exposed on? It's something that we do to this day. Even during COVID, we've worn masks and gone on socially distanced walks. Keeping this ritual going has been very central to the company always feeling in tune."
One of our early employees ended up moving on, and he sent me a note a couple of years ago, which said, "I think I've finally figured out the Upstart founders. Paul is 'seek the truth.' Dave is 'do it quickly.' And Anna is 'bring everybody with you.'" It's the single best encapsulation of the co-founder personalities.


With the team in place and the journey in motion, the focus shifted to fleshing out the initial idea. Today, Upstart's product has grown into an incredible AI-powered lending platform, which they leverage to partner with banks and expand access to affordable credit. But the bet Girouard and his co-founders Anna Counselman and Paul Gu first started with took on a different shape.

When the First Round partnership first met and backed this trio, they were working on a "Kickstarter for people" idea, where folks could swap future earnings for a crowdfunded personal loan — an alternative to traditional lending that relied on FICO models which excluded those who didn't have great credit scores.

"We started in 2012 with this product that came to be called income share agreements, a name that has lived on beyond that business of ours. It was the founding idea of the company," says Girouard. "We got off to what felt like a pretty quick start. We were making progress, we were proving our hypothesis, and we were in The New York Times, so we were feeling optimistic in the very early days. And we always felt that it was going to start scaling next month or the month after."

But that scale didn't arrive. Before finding product/market fit, the "Is this thing going somewhere?" question hangs heavy over the heads of early-stage teams, and the Upstart team was struggling to come up with an answer at this key inflection point. Here, Girouard shares how they course-corrected and eventually found a path to scale.

Take the Airbnb vs. PayPal test, and look for hordes at the gates.

"There are these stories in Silicon Valley, and you don't know which story applies to you. Here's what I mean by that: There's the story about Airbnb, where they landed on this business model, and it wasn't working, but they just kept turning the knobs, fixing it and shining it. And then, finally, it was taking the photos of the apartments in New York that made it work right. So the Airbnb version is, 'Stick with it, man. Just keep shining it and fixing it,'" says Girouard.

"And the other one is the PayPal story, where they had eight business models within a year until they found one that worked. And the lesson there is, 'Just keep iterating and trying different things until you find something that works.' So we didn't know whether we were Airbnb or PayPal, or something else. We had to read the tea leaves. Was it a 'bear down and get it done' thing? Or was it a, 'Man, this is a bad idea. We need to try something else,' thing? For a long time, we were on the Airbnb model. We thought we just needed to fix it. It's a great idea, people love it, it's just not scaling. We would continually try to shave off this edge, or make it feel a little more mainstream without abandoning the original concept."

This dilemma preoccupied Upstart's seed-stage board, of course. "There were a lot of conversations about it, but the sharpest memory that stands out is a board meeting where Josh Kopelman said to me, 'You know, when First Round first invested, I remember you telling me there were going to be hordes at the gate for this product. I don't sense that's the case here — are there hordes at the gate, Dave?' And I said, 'No, Josh, there are no hordes at the gate," Girouard laughs.

"It was an admission that while we were showing numbers and progress, we were trying to talk around the fact that we hadn't quite figured it out yet. This income sharing thing we thought would take off like crazy just wasn't taking off."

For Girouard, this was a catalyzing moment. "Literally the next day, my co-founders and I went to this coffee shop in Palo Alto, and I said, 'Look, we have six months of cash left. We need to make a radical move because I don't think we're going to discover anything in the next few months to change our trajectory here.'"

It was working on a small level, but it wasn't scaling — and with six months of cash left, there were no signs that it was going to. Ultimately, we came to the conclusion that turning those next two knobs wasn't suddenly going to be magic.

"Fortunately it was a glove save. It worked incredibly well. We were still a small team, probably around a dozen people then. And within hours of that coffee with my co-founders, we were taking action and making it happen," says Girouard. "There were some subtleties to figure out and we did put a big hedge in there, but in any case, we moved very quickly — a few months later, the business had pivoted completely to go from this income share agreement to a straightforward loan product."

Don't be afraid to step into the crowd and burn the boats.

When it comes to pivots, there are two varieties: full-blown restarts (think Odeo into Twitter, Tiny Speck into Slack), and 20- to 30-degree rotations, where companies take a unique idea and turn it until it clicks. Upstart fell into the latter category.

"It wasn't a 'throw everything away and start over' situation. It was a step from what we were trying to create to something closely related, which in the end was a consumer loan," says Girouard. "The real issue was we didn't know whether we had a foot to stand on in the lending market. While we were coming at it with some really different data science, at that time, we had no idea whether that would be enough sustainable differentiation against some very well-established companies at the time."

We went from trying to create a new market on a whiteboard to stepping into an incredibly crowded competitive market. It was a completely different dynamic, but it turned out to be a much better one for us.

Another struggle? Figuring out just how hard to swerve. "We had to decide what to do with this thing we had already built. I would say I'm semi-ashamed of how we went through a period where we decided to keep both," says Girouard. "We still so loved the original idea that we originally thought that when a customer comes to us, they can get either an income share agreement or a loan. So we spent a few months building that out, and a lot of energy went into trying to make these two products coexist. That was the hedge. We didn't quite burn the boats."

But the launch of the loan product made the path forward clear. "The interest and volume of that was so dramatic, that three days later, we end-of-lifed the ISA product. We probably could have scrapped it entirely, and it would have saved some time," he says. "There was a lot to do. It was a high wire act in terms of restructuring the company and all the legal issues around having a loan product, the bank partnerships we had to establish, and so on. I remember just fast activity and intensity. Over a Christmas holiday, I talked to 20 different banks about working with us, just smiling and dialing. But fortunately, the loan product just started taking off right away, and that really saved the company."


"We had a core thesis of how to build something better in the category that we started on very, very early. There were all sorts of different things — good and bad — going on in the fintech and lending world, but we operated with blinders to all that," says Girouard. Here, Girouard ticks through the challenges the Upstart team ran into in their category, the external narrative, and their fundraising efforts.

The category:

From heavy regulations and consumer perceptions to some lenders' checkered pasts and lack of credibility, it was a tough industry to build in. The Upstart team faced uphill battles, both from operating in their category more generally and from the specific bet they were making.

"When it comes to lending, I think the whole world sort of came to the conclusion that it's kind of a commodity — anybody can lend if you have money and some basic analytics. And if you do it well, you'll make some profits, and if you don't, you probably won't. But for whatever reason, people didn't seem to believe that you could apply a modern cloud computing and data science to create a dramatically better product," says Girouard.

"People would say, 'Yeah, is your lending model really going to be any better?' It's almost like everything they've learned about computer science and the potential of the software, they threw out the window when they looked at a lending-related business and said, 'Nah, that's just a human instinct business. All the software and data in the world won't make a difference.' I feel like that's the way some in the industry to this day still think about it," he says.

The narrative:

This challenge made it difficult for Upstart to sculpt a brand that stood out. "To be honest, we went through times when either for the press or VCs, it wasn't worth talking to Upstart because the winners had already won. And then when the world figured out the winners hadn't won, it still wasn't really worth talking to Upstart because the industry kind of looked like a disaster, frankly. And we just didn't seem to be able to convince most of the world that it really was something very different. And I think we felt that way for years," Girouard says.

Whether it's the press, the Silicon Valley community, or investors, we never really got what I would consider strong validation from the outside world of what we were doing. Instead, there was strong internal conviction inside the company that we were onto something very good, even if the rest of the world hadn't quite figured it out yet.

"We always flew under the radar, frankly. And I'll be honest — oftentimes, that was just annoying. I felt like we were some sort of sideshow to these big brands and personalities. But we had a really strong theory of what would be a dramatically better product, and we knew it would take quite some time to prove that out, so we were ready and willing to do it under the radar, with a real keen sense of what the true north was and how we were making progress against it."

This external narrative had an impact inside the Upstart building. "It takes a lot to get a team motivated and moving forward without a tremendous amount of external validation. Especially when you have internal Slack channels, sharing articles like X company just raised money at Y billion dollars," says Girouard. "For whatever reason, there were companies that were just much better at making an impression on the world than we were."

There were a few things we held true and marched forward on, and then everything else we were super flexible about. It was keeping those blinders on to not get distracted by shinier stars or what others were doing in the industry, and instead just believing in our central thesis and what we're trying to accomplish.

Still, it wasn't easy. "Frankly, it was a struggle to face the questions at TGIF every week and constantly tell the team, 'Don't worry about not being a unicorn, that doesn't really mean anything,' or 'We actually think it's a good thing that we haven't raised that much money,'" says Girouard.

The co-founding team at a TGIF meeting

The fundraising:

Pulling on that fundraising thread, Girouard highlights raising capital as another big challenge Upstart faced. At first blush, this seems surprising — the company was well capitalized and counted many notable firms as investors at all stages.

But for Girouard, behind the scenes, it was a sore spot. "Without question, fundraising was the hardest part of building Upstart, and I sucked at it. Still to this day, if I had to do it over, I'd probably still suck at it. It was the least fun part of my job," he says. "One of my early investors, David Weiden, thinks there's a strong, inverted relationship between building companies and fundraising. And he said to me, 'Dave, you're good at building companies. You're probably not very good at raising money.' And it was totally true. It was always a struggle, either because I didn't enjoy it, or because folks thought someone else was already the winner, or because the category sucked and they didn't want to put money into it. Just to be clear, the last time it was easy to raise money is when I raised a seed round while leaving Google in 2012."

To put a finer point on the source of his struggles, Girouard offers up another example. "I think we were raising our Series B. Even though First Round was already an investor, Josh had offered that we could go present in front of the partnership just as a practice to get all their fundraising feedback that would help us," he says. "So Paul and I went to do this dog and pony show in front of the First Round partners up in San Francisco. I still remember the feedback we got because while it was very helpful, it was also very piercing. One of the partners wrote: These guys seem pretty smart, but they are no Pied Pipers, so I just don't know if they're going to gather enough of a following. And I remember thinking, 'Oh, that is so damn true,'" Girouard laughs.

Reflecting on why that is, he offers up this theory:

If you're looking for a crazy, visionary founder, I don't think anyone describes me that way. I look like the CEO you bring in when the founder goes off the rails.

"You could ask the venture community — most of whom said no to us multiple times — but I just don't think we seemed like the prototypical founders. We didn't seem like the type to create something giant. It sounds really strange, but I think we just didn't have any craziness," he says. "While Paul is brilliant, he's very understated. I remember going into these fundraising meetings and telling Paul, 'Stop being so deferential to yourself. Just say, 'It's incredible.' Just use that word.' That's always carried over into the personality of the company. Eventually that means you find the investors who had an appreciation for that," says Girouard.

He also notes that much of the discussion about fundraising these days doesn't match up with founders' experiences on the ground. "I shake my head at founders who write blog posts about the challenges of handling multiple term sheets, or tweet about interviewing and doing exercises with potential investors to understand how they might behave. My reaction is, 'Are you out of your mind?' About 0.01% of founders out there have this problem of so many term sheets coming at them. To help out the other 99.9%, when you get a term sheet, take the damn money, you got it," says Girouard.

In many ways, it ended up being a real strength of the company that we repeatedly raised less money than we intended or expected to. Our thin bank account meant we got good at building the company without throwing money at problems.


Setting the challenges of brand and fundraising to the side, from our perspective here at First Round, Girouard's star perhaps shines brightest in terms of how he managed his executive team and set the tone as CEO.

This paragraph from his advice on evaluating and giving feedback to executives warrants revisiting: "CEOs are faced with a blizzard of challenges and issues on an hourly basis. We're constantly torn with decisions about how our time should be spent, which areas need closer attention, and whether a request of our time is worthwhile. And counter to what many believe, this doesn't change when your company is doing well — every moment of glory is fleeting, quickly swept away by the next looming crisis and the need to reach the next level of success."

To dig deeper into how he's balanced these constraints, Girouard unpacks his management philosophy and details his thinking on building out the executive team.

Observe the machine and manage by exception.

Girouard has a specific philosophy in how he approaches the role of CEO. "Every CEO comes to the job differently. There are probably many flavors, but I tend to simplify into two: One is more of the Elon Musk, or Steve Jobs mold, where you are in the middle of everything and your imprint is on every decision. And that's not remotely negative — Apple and Tesla are two of the most successful companies in history, and Larry and Sergey were like that in a different way at Google," he says.

"The second is my philosophy of management by exception. With Upstart, I've had this view that I'm trying to build this thing that's going to be around long after I'm gone. So I feel like decisions should be made as far down in the company as they can. I should be doing things that only the CEO can do. If I have to do people's jobs for them, I always ask them why that is. If I have to make a decision that I think somebody on my staff should be able to make, it makes me wonder why that is," says Girouard.

"And it doesn't mean that I'm looking to just kick back and read TechCrunch or the First Round Review. Rather it's that I want to be thinking about how the company is operating. The management by exception construct is that I'm trying to build this engine that just runs really well. I want to be observing it in motion, and I want to say, 'Did that happen the way it's supposed to happen?'" says Girouard.

"That machine requires incredible talent at the executive level. It requires good direction and coordination. And it always has to grow and mature and get better at what it does. I want the people who work for me to feel stretched and to be in a place where many of them could take my role, and the company really wouldn't miss a beat."

As CEO, if someone brings a problem to me, of course, I'm always anxious to solve it. But I'm always going to think, 'How did this problem come to be? And how did it come to me? And should it have come to me?'

Girouard offers up an example to illustrate: "Somebody came to me just a few weeks back, and said, 'Hey, I'd like to put some money towards X. I'm not sure if Upstart's really up for putting money towards X, but I think we should. Dave, can you approve this?' And I was like, 'I don't want to approve this. There's plenty of other people that could say yes to this. You don't need to ask me,'" he says.

"Don't get me wrong — if I don't like something that we're doing, trust me, I can be very difficult. I'm not passive in any sense. It's just that my ideal scenario is that I have an amazing team that's doing the right things. I'm helping, advising, judging, and occasionally breaking a tie, but ultimately the company is a well-oiled machine that knows how to do what it does."

Run the executive team with UBRs and burners on low.

To oil that machine, Girouard relies on keen observation and regular maintenance checks of his leadership team. "I'm always observing what's going on across the company. There are areas where I feel like it's humming, and others where I feel like we're sputtering, or maybe I just don't have enough visibility to it," he says.

"If there are parts of the company overly stressed and nervous, I want to help them out of that. If another part of the company is under-stressed and not really pushing hard, I want to probe more deeply into what they're trying to do."

To facilitate that probing, Girouard leans on his weekly exec staff meetings. "I don't like to be militant about them. We aren't checking on lots of projects. When the executive staff comes together, it's really talking about the machine as a whole — what parts are working and what parts aren't," he says.

The Upstart executive team on a virtual staff meeting.

"I tend to do what my CFO Sanjay Datta calls the UBR — the unstructured boss rambling — at the start of every exec staff meeting to share what's top of mind in terms of things that I'm observing and worried about," says Girouard. "More often than not, I can introduce one or two ideas that have been in my head that hopefully will get some of them to think, 'Wow, maybe that would be a problem.' I tend to be thinking a little down the road, about things that no one else has quite centered on — and I'll turn the burner on low on those problems."

As CEO, oftentimes, it's just about observing or thinking about something that's probably not yet on the horizon for others — you're a chief worrier, slowly bringing problems into focus for the company that needs to be addressed.

Build the executive team by leaning on references, not interviews.

Of course, all the maintenance in the world won't supercharge a machine built from faulty parts. The CEO's ability to recruit, retain, and motivate incredible talent at the executive level still remains an underexplored topic in the startup world, so we were eager to hear Girouard's take.

"I can't think of anything that a CEO does that's more important than assembling the team around you — and it's extraordinarily difficult. Just chatting with my co-founders, I've come to the conclusion that when you're making an executive hire, if you get it right 50% of the time, you're doing pretty well. That sounds terrible, but hiring executives into growing businesses is extremely hard. And sometimes, for the very best efforts where you really think you did all the right things, it just doesn't work. I've gotten it wrong many times, frankly," says Girouard.

"When you're building a strong team, you're always going to have some parts that are stronger than others, which will bring you to decision points where you need to add strength. That requires painful processes, whether it's moving somebody out, or going through a six- to nine-month recruiting process that ultimately doesn't work out," he says.

When asked for advice on managing through that painful process, here's what Girouard offers: "My first thought is that the interview process isn't particularly helpful. It's helpful in the sense that when you're hiring an exec, you have to come to the conclusion that this is a person you want to spend a lot of time with, someone who you just intuitively feel you can work well with — and that doesn't mean they're similar to you. So if you come out of a process with somebody and you're ready to spend a lot more time with them, that's a good sign," he says.

"But in terms of whether they're going to be a success and how strong they are, interviews are just terrible for sussing that out. I'm fairly convinced there are just people who are extremely good at interviewing. And even if you are very thoughtful about how you structure interviews and the questions you ask, in my experience, what they've done and the success they've seen to date is a far better predictor of what they're going to do in your situation."

Of course, that sparked our curiosity as to what Girouard does find to be a valuable signal in the exec hiring process. "People will probably think this is a backward answer, but I feel like I learn more from an executive candidate's references."

I don't think references as the last check-box in the hiring process makes any sense whatsoever. Frankly, you've usually already made your decision by then — and you're trying to make yourself feel good by double-checking something.

Here's how Girouard makes references more effective:

  • Find out where their loyalties lie. "Before doing a reference, ask yourself a basic question: 'This person who I'm about to get a reference from — where does their loyalty lie? And clearly, if it's somebody you don't know who the candidate introduced you to, there's an easy answer to that question. Now, that's not to say this has become a worthless reference. It's just important as a starting point to understand and remember," says Girouard.
  • Ask neutral questions to draw out information. "You can get a lot of useful information out of almost anybody, even someone who gives rave reviews and seemingly has nothing bad to say. The trick I've found is to ask neutral questions, where neither answer paints a better picture," says Girouard. "For example, you might say, 'We're thinking about a couple of different roles for Sally, and one of them is working a bit more by herself in an analytic role which takes a lot of brainpower and creativity, whereas the other one is more team-oriented where she'd have to work well cross-functionally.'" Girouard notes that if they opt for that analytic, individual style role, then you've learned something and can double-click.
  • Be blunt. "Most people don't want to lie. I know when I've given references for people who I had mixed opinions about, I always told myself, 'I'm not going to lie, but if they don't ask the right questions, that's their problem,'" says Girouard. To get around that tendency when you're the one dialing up references, sometimes you have to be blunter. "One of my favorites is, 'Would you hire this person without question again?' If the person says, 'Yes, no matter what, I would hire this person again,' I would say, 'Great. That's a good answer. Why haven't you?' If they answer with some reservations, then you can ask, 'What are the circumstances where you would, and what are the ones where you wouldn't?"
When it comes to references, you're not necessarily trying to find out that this person's terrible at this or good at that — you're just trying to paint a picture and see what you can't see. Asking neutral questions forces the reference's hand to reveal some threads you can pull on.


But the CEO role isn't just about managing the executive team, making decisions and adding key hires. It requires evolution, the kind that comes when you step back from the more granular details to focus on the bigger picture, push your thinking and shore up weak spots. In the last leg of this tale, Girouard reflects on his personal growth and evolution as a leader.

"When I left Google, I had maybe a thousand people who worked for me. And all of a sudden, when I started Upstart, I had zero," he says. "But I swear, once we got to five or six people, it was surprisingly not that different. And that sounds really strange, but there were common elements — in Upstart's early days, we had to figure out what to do next, we had to make decisions, we had to be resourceful. In the role I had at Google trying to build enterprise apps, it was very similar. I didn't feel like I was at General Electric — we had to be just as creative and innovative there," Girouard says.

Dave Girouard, back in his Google days.

He serves up an example: "You might remember Google Search Appliance. Before there were even Google apps, we sold this yellow box, and we decided to make a cheap and cheerful version of it, which we ended up calling the Google Mini. That product was only going to be a few thousand dollars, so you couldn't have salespeople selling it in the same way," says Girouard. "We had no idea how to sell it online, so we literally put the Google Mini in the T-shirt store. It was a little e-commerce site hosted by this tiny company, somewhere in Missouri, where you could buy a lava lamp, a Google T-shirt, or a Google mini. And that was literally how we made that product go."

Learning and unlearning what you brought with you.

As Girouard found out, some lessons in the move from big to small mapped over nicely, while other habits he had to unlearn. "Even when I went to Google, I had been around for quite a while," he says. "But Larry and Sergey were just so out there in terms of questioning and challenging every assumption you had about how the world is supposed to work," says Girouard. "Everything you learned about how to do a product roadmap, how to specify requirements, how to listen to customers, you could just tear up those playbooks. They had complete confidence in their intuition and their ability to ask questions and do things entirely differently. And that's the magic of why Google is Google."

Girouard, of course, absorbed this style of thinking. "It took me a while because it's easier if you're 22 and you show up at Google and just go, 'Damn, this is amazing.' But I was 30-something, so for me, it was like, 'Wow, I need to unlearn a bunch of things.' But I was there early enough and long enough that I began to appreciate the idea of starting with first principles, questioning things, and not really accepting anything as the way something should be done."

You don't have to inherit solutions, ideas, or biases from anybody else. You have the freedom, particularly as a founder, to go with your gut.

But when he left to start Upstart, Girouard noticed a pattern that could hold him back. "At Google, the whole company, myself included, was very deferential to what Larry and Sergey thought. You just naturally would be like, 'What do Larry and Sergey think? Am I doing the right thing?'" says Girouard. "But when I left Google, I had to invert that overnight. I needed to be the Larry and Sergey — not that I'm comparing myself to them by any means, but in the sense that I can't be deferential to anybody. I need to have strength of will and opinion as a founder."

As for how he sharpened that strength of will on the startup whetstone, Girouard opens up his toolkit to share four mental models or internal exercises that he's come to rely on.

Exercise #1: Visualize what the company will look like in two years.

Envisioning this future state isn't a process, though. "It's not quantified. It's like looking at a bunch of Kodachrome old-school photographs on a wall. There's this path that we're on, and if we're successful on that path for two years, things would just look naturally look and feel completely different. How do our people feel? What does the company feel like? How does the world perceive us?" he says. "I don't even write them down. It's just sort of these simple images in my head that you have little glimpses of."

Here's an example of what he means: "I can imagine a place where all of a sudden our brand is really big — what that would feel like and what would be different from where we are today? Or a place where we're in six categories, not one or two. Or where we're a global company, not an American company. And then every day, it's just disappointing because we're not that, so every day is trying to figure out how to get from here to there."

Of course, without the aid of a crystal ball, that vision is never right. "It's not crystal clear; it's directional. It's a mood, a sense of what it could be if everything went right according to your dreams," says Girouard. "I'm trying to close the gap, but maybe we're not going to get there without a different person in that function, or without this type of relationship that we don't have today. So sometimes it does crystallize into a specific thing, but it's a very nebulous concept."

Focus on that hazy little notion of what the company could be just a few years down the road.

Exercise #2: WWYRD — What Would Your Replacement Do?

"Another mental exercise I've invested in is thinking about what would happen if tomorrow my board got together and fired me," says Girouard.

"What if they said, 'Dave, thank you for playing. You're done. We are recruiting a new CEO for Upstart.' And they went out and found the very best CEO in the world, one who would just make me look like a fool. And if they bring her in and she starts at Upstart — what would she do differently than what I'm doing? I think about that for a while, and then I tell myself, 'Why the hell aren't you doing those things?' It's just this weird game I play to get myself to recognize that while I'm doing some things okay, I can be lulled into a place of feeling good about myself when I'm probably not doing some other things very well."

Exercise #3: Hit the big red button.

"Another one is a way to handle the stress of when things boil over, and problems are popping up. This was happening to me at Google all the time and probably less so now at Upstart, but when things pile up and your coping skills are almost at their wit's end, I have this mental model of a reset button," says Girouard.

"And it's literally just this red button in my head, and I press reset. I tell myself, 'I'm starting over. No problem is unsolvable. And we're not building nuclear plants, so nobody's going to die. I'm going to think about these problems one by one and realize that none of them are going to kill us, and each of them are solvable. A mental reset button just clears everything, and that's one trick that I've strangely relied on for many, many years."

Sometimes you just need little mental models in your head to manage your own psychology as CEO.

Exercise #4: Blend your bosses.

"Your truth comes out whenever you get angry, go quiet, or get despondent. The art of being a CEO is being able to get outside yourself and see yourself before it happens," says Girouard.

While that's easier said than done, he shares his mental trick for forcing that external perspective. "Whenever I'm heading into a 1:1 with somebody, and I'm angry about something, I'll think about somebody who was my boss or mentor in the past, and I'd wonder how they would have handled this. Across your career, you see different personality types who all are tremendously successful. You have to think about what's the right blend for you and where you can really strengthen yourself."

By way of example, Girouard shares three individuals who are often on his mind:

  • "Paul Lego was the CEO of a small company I joined before I was at Google called Virage," Girouard says. "I interviewed with Paul for some kind of product manager job after Apple, and I can remember five minutes into the interview, I knew I could trust the guy with my life. It would just strike me forever that this guy made you feel that sort of connection and trust in a matter of minutes. It's a remarkable quality, one I wish I had — I don't claim to."
  • "My first boss at Google was Omid Kordestani, who was the first real business person at Google. Whenever I was having the worst day, trying to get them to care about this enterprise cloud stuff before it was really what it is today, I remember every time I would meet with Omid, I came out feeling a thousand percent better. He wasn't even paying attention to my business, but he knew how to make me feel better about what I was doing. That uplifting spirit was something I wished I could have."
  • "My other boss at Google was Nikesh Arora, who was a very different personality type. He's a little less warm and fuzzy, but an incredible executive at getting things done and performing at an extraordinary level. He just broke glass. He was tough on people, but he was okay to almost sacrifice himself. To his credit, he had a willingness to not need to be loved every minute. And I respect that. I don't know if that's exactly the model I aspire to, but there's a lot to learn from it."

Taking a beat in his role as CEO of Upstart to reflect on what he's learned from others in his career just saves the moment, Girouard says. "That's the best I can do — to try to always create some distance for myself so that I can be more of a neutral observer and prevent myself from doing things that might not be very helpful. It doesn't always work. Sometimes the emotion takes over, your instinct comes out, and you are who you are," Girouard says.

But I think every thoughtful leader can do their best to manage themselves first. If you really try to bring out the best in yourself, you'll realize that there's always an alternative approach to any situation.

This article is a lightly-edited summary of the key takeaways from Dave Girouard’s appearance on our new podcast, “In Depth.” If you haven’t listened to our show yet, be sure to check it out here.