How Thumbtack CEO Marco Zappacosta Parses Through Mountains of Advice as a First-Time Founder

EP.18 - Marco Zappacosta FINAL

Marco Zappacosta: [00:00:00] It's useful to recognize in the ways that you're not a special flower or, you know, early days you think you and your company are special in every which way. And then over time, you're like, Nope, there's a lot of stuff that we go through that everybody goes through. And then there's the some real areas where nobody can tell you what to do.

And you're almost certainly not going to get it right by listening to what an advisor or some random person tells you. And if they're smart and successful, simply because they're not the ones in the weeds,

welcome 

Brett Berson: [00:00:32] to in depth, a new show that surfaces tactical advice, bounders and startup leaders need to grow their teams, their companies, and themselves. I'm Brett Berson, a partner at first round, and we're a venture capital firm that helps startups like notion, roadblocks, Uber, and square tackle company building firsts through over 400 interviews on the review.

We've shared standout company, building advice. The kind that comes from those willing to skip the talking points and go deeper into not just what to do, but how to do it with our new podcast. In-depth you can listen into these deeper conversations every single week. Learn more and subscribe [email protected]

for today's episode of in-depth, I'm really excited to be joined by Marco Zappacosta. Marco is the co-founder and CEO of Thumbtack, which is a services marketplace that connects folks to local professionals for everything from contractors to wedding, DJs, and pet sitters, Marco co-founded Thumbtack back in 2008 as not only a first time founder, but as his first job after graduating college in today's conversation, we pull on all sorts of threads in thumbtacks company journey, and Marco's 13 year evolution as its CEO.

And we pay special attention to the many cultural hurdles that founders must clear on this path to scale. What really stood out to me about Marco is how thoughtfully he approaches these challenges, topics like culture or company values come up over and over again in founder circles. But advice on this front can often fall flat from articulating thumbtacks values and how he hires executives that align with that vision to carrying your values through, even in the hard moments, Marco's got a knack for mining, these surface level topics for real gems.

He dives into the company milestones that require a return to first principles versus pulling from a tested playbook. Marco also shares the mental models he leans on when parsing through the mountains of advice, he gets as a first time founder and CEO. He takes us inside thumbtacks boardroom and how he ensures these quarters meetings are a critical resource and not just a time suck.

And then he explains why he shares the board deck with his entire company. He also candidly and Bindley reflects on thumbtacks COVID related layoff last year. And what he specifically did as CEO to make sure the folks that remained still had confidence in the company and his leadership moving forward.

And finally, he really opens up his playbook for choosing what to spend his time on as a super busy CEO with only so many hours in the day. And perhaps more importantly, how he stays accountable for these priorities today's conversation is a peek behind the curtain at the hundreds of decisions that occur at each step of a company's winding path, many of which tend to go unnoticed.

It's of course a must listen to for founders, but folks all over the org chart will learn a ton from Marcos thoughtful approach to the intangible pieces that make great companies really stand out. I really hope you enjoy this episode. And now my conversation, thanks so much for joining us Marco to begin.

I wanted to start by talking about the importance of strong culture and company values. Now, this is something that even though it's been talked about over and over again, I think for a lot of founders, it's not really acted upon or fully understood. So I'm curious if you have any mental models or thinking about culture.

Or things you've learned in this space that are a bit unique 

Marco Zappacosta: [00:04:33] or different tension is what you read is about culture building and how to define values and all the explicit work that comes with these efforts. But I think what that undersells is that early on these cultural attributes and inherent or implicit values of an organization are really a reflection of who joins early on.

And it's not an engineered thing. It's not a designed aspect of the early organization. It's really emergent from the shared values, the self-selection that brings that early team together. And so what I think that highlights is like early on, you are building culture and setting the foundation of your.

Value system really through the people that you hire. And it is nothing more than that. In some ways it's almost a mistake to try and be too explicit about it upfront. You don't know who's going to be attracted to your idea or why, or to you, I think people are often self-aware about these things. So I've seen us kind of go in these three phases where at first culture was really emergent and I started this business, uh, straight out of college.

I'd never really worked anywhere and you don't always appreciate the impact that one person is going to have on the vibe on the feeling of the place. And I wish I had known that and I would have been even more focused and maniacal about who we brought in, but then there's sort of is the second phase where, you know, I don't know, we're probably like 50 odd people where we started to scale from a headcount perspective and we needed to leverage others to.

Interview candidates and sort of apply a fit question. Like, do they fit our culture? Do they fit our values? And they reasonably asked us, so what are our values? What is fit? And so in the second phase, you have almost like a, a definitional exercise where what you're trying to do is take this sort of like implicit culture, implicit set of values, turn it into something explicit and really less about being better or worse than others.

Just being distinct and being clear to those that you are attracting, how you plan to be, how you operate, who you are and how you approach things. And then in the third stage, and I think we've gotten there only more recently in the last couple of years. So 10 years into the business, you can start to really treat culture and values as something engineered and designed and to be more aspirational, not simply a reflection of who you are and who you're trying to attract, but who you want to be.

And, you know, I've seen Thumbtack go deep in each of these three moments and I hadn't. I don't see that talked about enough. And I think too often people over apply the lessons of the late stage of like, oh, how are you defining your culture? How are you living your culture to the very early stage and not highlighting enough?

How it's those people early on? And the, I dunno if it's 10, 20, 30 odd people who really set that culture, but that's how it's going to come about. It's an emergent quality of an early business, not typically an engineered, right. 

Brett Berson: [00:07:39] To dig into this in reverse order. One of the things that I often notice is that if you've been building a company for a long period of time, you often have early people that are like frustrated with way the culture is changing.

And a lot of people who become either squeaky wheels or. Are reminiscing of when it was 30 or 40 people, and now it's 150 and all this stuff. That was great. Isn't great anymore. Have you noticed that in your own journey and is there a way to get ahead of that? Is it just a law of scaling in time that will happen?

Marco Zappacosta: [00:08:14] Yeah, I think it's fairly inevitable, but I think there's sort of two separate diagnoses for why it happens first. And in some ways more challenging are the people who over time you realize are not a fit, they are not necessarily embodying the culture and values that you want to build into the place.

And that realization isn't always apparent upfront either because you don't understand your own culture or your own preferences or this person well enough. And that ultimately is how. You're tested and whether those values actually mean something to you or not, then you have the sort of more low key version of this, which I think is very common where someone miss attributes, some cultural habit, like doing weekly demos, where we walk to each other's computer and show off what we did that week with a value with a principle.

And I think that's something that's really important. And I think often muddied, right? The word culture. Is using these two contexts one it's these habits we eat together. We do these Friday, all thumbs. We have an open email policy or open calendar policy. These are all I think, habits or ways that values are lived, but the core of what a culture is, are the values and the principles themselves, the way that you make trade-offs or reason about tensions and really provides sort of a compass.

And what ends up happening is, and this is how leaders are tested and values are tested. It's like, it's easy to support your values when it also supports your business, or is what you were going to do. Anything that the challenge is, how do you apply it in hard moments? It is something that I imagine just about every business faces as they scale, and as they go, can you share a story 

Brett Berson: [00:09:57] or when you think about applying values in hard moment, what that looks like, and I agree with the idea that values are tested.

Oftentimes maybe when it's in your worst interest or it's tricky, not necessarily when everything's kind of hunky 

Marco Zappacosta: [00:10:11] Dory. Yeah. I mean, look at 2020, and COVID definitely tested us in late Q1 and into Q2. There were real fears about what COVID would mean for our business and how depressed the demand might be.

And because of that, we had to do a big layoff about 35% of the company. And one of the big questions is how do you approach it? How do you communicate about it? How do you decide what's in and what's out? And we took a very value centric approach. And I think for us, what was important is we recognize that this was a hard moment, but it was an interesting one because nobody blamed me or the leadership team for COVID right?

Like this was a true act of God. And the only question is where people are going to gain or lose confidence by how we dealt with it. And the hard choices that we had to make. And I think the power in these moments is that despite how hard they can be and how searing they feel, they're ultimately very revealing.

And if you do a good job or you do a, a job that reinforces the values, you say you aspire to, I think it's a moment where you build enormous trust and loyalty because people believe you, it highlights that you really do believe these things and that you really live these values. Our first value is lead with why, and you know, what that is all about is recognizing that whatever decision you're faced with you need a point of view.

And that point of view needs to be grounded in some first principles about that decision. And so what I did the day after we did the layoff, then next morning, I gathered the team. Obviously those that were still on board and I. Took them through the decision tree. First question that we're trying to answer is over what horizon are we optimizing for?

There's deep uncertainty in this world. What are we insuring against? Is it six months, 12 months, 1824 told them why we pick the number that we did and said, okay. Given that the second question that we had is what is our expectation and assumption about what COVID is going to do to our business between now and then?

Okay. Here are the six scenarios we came up with. Here's why we picked scenario number four. Here's why here's what it says. Okay. Once you take this as a fact, then that has implication for the gap that we have between current financial architecture that we have, and the one that we need to have to achieve this confidence in long-term viability.

And I basically laid it bare. You could argue that's in some ways a value of transparency, but I think there was something deeper here, which is they saw how we applied our value in a hard moment and how it helped make this decision clear and thoughtful and reasoned and something we can feel confident 

Brett Berson: [00:13:11] in back to the other extreme.

When you were talking about culture as an emergent property of the early team you hire, how do you think founders or future founders should action on that? Other than the obvious, which is be very, very careful. About the first three, five, 10, 15 hires. 

Marco Zappacosta: [00:13:34] So I think founders, and certainly I did this early on tend to over index on talent.

And I think under index, on fit, you say know, it's so hard to recruit when you're two people with no brand, no money, no experience, no traction, you know, it's like, that's a tough sell and you often want to go after the most talented or most skilled person when. In reality, like, of course you need that bar, but typically what causes relationships not to work?

It's not so much a lack of talent. It's usually a lack of fit. And so recognizing that, and it has opportunities for bias and there's risks that you over-index on people who are like you, or you're used to where you're sort of comfortable around. And so it's not without risk, but I do think that fit is in some ways sort of underappreciated sometimes early on.

And when you look back often, Most of the interpersonal issues. It's not cause like one person was smart and the other person wasn't, or one person was capable and the other person wasn't sure that happens, but those are the easy ones to deal with. The much harder ones are it's like people have a different approach, they have different priors, they have different implicit biases or preferences when it comes to how to do something and it's not right or wrong, it's just left to right.

Or blue or green. And those things can eat up a lot of time. And typically when there's a hype fit, there's good trust. And when there's trust, you can move fast and you don't need to feel like going to the mat on everything or having people issues crop up when you got more important and harder things to solve.

So I think that's a big one and fit. Is this sort of like. They concept. And I think often that gets talked about culture fit, but that's, I think too narrow it's really fit broadly defined it's yeah, sure. Values and culture, but it's also ambition. Is this person super ambitious or are they more conservative?

And does that line up with the founders in the organization? What's their time horizon? What's their way of working a silly one for us early on, as my co-founders and I were always very document oriented, oriented around the written word as a way to document ideas, decisions to organize thinking. And that was like something we never talked about.

It's not something we even really knew about ourselves was just like the way that we were. And that's the way that we like to work. And. There were a couple of people early on, who weren't interested in working that way. And they were clearly smart and capable. And one was in a very seasoned executive who was great, but this wasn't their approach.

And it wasn't that they just weren't naturally interested in it. They just chafed at being asked to operate in a way that didn't play to their strengths or simply how they thought was the best way to do it. So fit is a fuzzy, but very important and multifaceted concept that I think is really critical to get.

Right. So 

Brett Berson: [00:16:31] on that idea, if you were to leave and start a new company in a month, and you were interviewing for your fourth employee, what are the pieces of that process or what would that look like? That would give you signal around fit? What are the questions you ask the things you would do together to get at?

Whether this person would be a great fit as a fourth employee? 

Marco Zappacosta: [00:16:52] Something I care a lot about is. Self-awareness and through that humility and intellectual honesty, now you don't all have to care about that. It just matters to me and how I want to work. And one of the things I do is ask people first, what professional accomplishment they're most proud of and really dig on that and ask them to take me really deep.

And so it's not like a, I grew a lot, or I've accomplished. It's a lot, like this specific thing happened at this job and I'm really proud of it. And I get into what was their role in it? What do they feel like they uniquely brought? Why is it a source of pride? And in that I'm trying to get a sense for how ambitious this person is, how balanced they are, the signing responsibility for the success, how they talk about themselves with their teams, how honest they are about, was it just up into the right?

Or were there challenges along the way? And then I follow that up about asking for people's biggest regret, professional regret, and typically somebody that's sort of riding high off the last question, cause they just got to brag. And go deep on something they feel really good about. And then this sometimes surprises people and you know, it kind of goes in two ways where one way is the person is like, oh man, there's one thing that instantly comes to mind and it's hard to talk about not proud.

Um, but as I really reflect on it, and that to me is the best answer and they take me through it and we talk about it and I'm under no illusions that I'm hiring perfect people. What I want to ensure is as I'm hiring people who are self-aware about being imperfect, have confronted that and have recognized that, and I've learned from it and grown from it because the alternative answer I sometimes, and maybe even often get is something that sure is like, oh, I only got a B, and I really wanted an, a like, oh, shoot.

This thing was just only a modest success, not a tremendous success. Like I want it. Right. It's just like one more chance for them to brag. I'm very turned off by those types of answers because you know what that says to me is this person either isn't self-aware or self-confident enough. To own that reality.

And that's not who I want to work with. So that's my version of a approach I take today. I wasn't as thoughtful or as sophisticated about it. When I was interviewing my fourth employee at the time, I'm being honest. I was really just trying to close these people that I felt lucky enough to get in the process that I was excited about, that they were excited about us, less about auditing every last facet of how we might want to fit.

And I think another one that happens maybe increasingly in Silicon valley is just the time horizon and someone looking for a two year gig to them level up and do something else. Is somebody looking to make a career out of it and this one place or somewhere in between, you know, I think especially for early teens, that's an important thing to align on.

And again, there's no one right answer, but being on the same page saves a lot of heart. 

Brett Berson: [00:19:43] So in that case, when you think about fit, maybe if you. Went to a blank sheet of paper again, and started all over. There's three or four, things like that, that you have questions that you probe that makes the totality 

Marco Zappacosta: [00:19:56] of fit.

Yeah, I mean, so first off there's technical fit and I don't just mean that in a sort of software or engineering sense, but simply can they do the job and do they have the skills necessary to be successful in that job? So assessing talent and their relative strengths, I think is a really important part of fit.

And the mistake I see founders make is you get greedy. You make your list of what you want this person to be great at. And your list is 12 items long. And what happens is you end up pairing for a lack of weakness rather than exceptional strength in any one area. And that leads, I think, to a more mediocre outcome.

So we push ourselves to sort of define the role in terms of the three key attributes that we want the person to bring in those attributes or skills or traits or approaches that are specific. And we gear our interview plan according to that. And then we really use our values as the way to think about the behaviors that we want.

These. People and most of all leaders to embody. And so in thinking about, start with why and, and leading with why you get at, you know, is this person a curious person, are they intellectually honest? Are they able to reason down from first principles, is there writing evidence of clear thinking when you start getting into make account or second value, how impact oriented as this person, how results oriented, how satisfied are they with simply thinking about things or defining things versus getting things done and getting points on the board own.

It is our third value. And that's really all about a sense of responsibility and just intrinsic motivation and people who feel like they owe it to themselves and their teams to deliver on their commitments. And aren't doing it simply because they were told to do it. Our fourth value is. She was teamwork.

There's people who like to sign their names next to their works of art and their accomplishments. And then there are those who want to highlight the group effort that it took to get it done. And so we look for the ladder and people who are excited about bringing others in and, and working with each other and, and investing in each other because it's an active process.

And then lastly, you know, say what you mean. So is this person comfortable enough in their own skin and clear enough in their values to be able to give feedback and pushback and to be thoughtful, but still be critical and open. And I think those are all things that we test for in, in various ways. So, you know, we really grounded in our values and have for a long time.

And I think that's useful because it makes those values real. You hire against them. And through that, you bring people that. Make the organization more that way and not less. And then it also sets the expectation where, you know, we hire for it and then not surprisingly our performance rubric for evaluating progression within levels and for promotions, et cetera, is structured around those same values and those behaviors.

So I really view that as like the cornerstone to this whole effort, really bringing it all back to those values and the behaviors that we're trying to have in our organization when 

Brett Berson: [00:23:04] someone doesn't work out or you think about the last 10 people that haven't worked out and been successful in this culture, what do you think you missed or in the interview process?

I assume, because you said it's often more fit than it is skills. That maybe you thought that they actually choose teamwork, but they don't or something like that. But I'm curious, are there any threads that tie traps or mistakes around 

Marco Zappacosta: [00:23:28] hiring errors? So we, at one point did a retrospective internally on this.

And the interesting part is what ended up being an issue was almost always cited. Upfront in the interview debrief and the packet that we write up about candidates and that taught us an important lesson because it was less about, oh, we were blind to such and such as issue around X. And only once we saw it, then we realized it was a problem.

And it was kind of something a little, I think, more insidious and more common where you see it, but you sort of rationalize it away or you make a compromise because typically you're really trying to hire. And so you're optimistic or you say, well, that won't happen here or, yeah, but. I didn't get a sense that that would be an issue for these other people or in this way that maybe we predict.

So it's typically not having enough conviction in the interview process. And that is tough because, you know, there's moments in the business's trajectory where you're really hungry to hire, and you really need that extra body to go faster or to shore up some team that needs it. So it is natural that that tension exists.

And the only way that we found a combative is to be very diligent and be very explicit about our process, how we define interview panels to be about auditing specific talents and traits. And through that, look at these assessments seriously and not just casually and. Hold ourselves to a high standard and it's like a muscle, like, it just has to keep being exercised.

And when you learn the wrong lesson, that sticks and that Sears and you tend to be better, but yeah, that tension I think, is inherent and really all these organizations. So with 

Brett Berson: [00:25:18] that specific insight, is it just discussing it or is there a way that you've, you mentioned a little bit about this, but sort of change process or what level of conviction should you have in hiring somebody?

Because as you were talking about a few minutes ago, you're never going to have somebody be a 10 out of 10 on 22 different dimensions for any given role at any given point in time. And so there's always this kind of tension or question of what is the right level of conviction to have, or what is sort of a yellow flag that you're willing to hire versus a yellow flag, which is going to blow up in your face in six months.

Marco Zappacosta: [00:25:56] So, interestingly, over time I have. Maybe less conviction in my own ability, or really just the ability of a interview process to assess talent. I think like specific technical talent, these tests are often imperfect. They're contrived. They're stressful in a way that regular work is not stressful. It's a attempt at auditing someone's fullness in a small number of hours and that's imprecise.

So I put more weight on references as a way of auditing like technical talent. It's really hard to fake something for 10 years. We're across three different jobs across seven different reference calls. And when in doubt, when we feel a little hesitant, but the references say, you know what? This person was really strong at this trust.

The reference I trust the reference on the flip side, if it's about fit. And if it's about whether I think this person will fit well with this organization, with me, with the manager, I trust my gut more. Even if the. References. I talked to her are talked to as part of the process. Don't highlight the concern we have.

If we have that concern, I trust that. And again, this is a judgment call. There's no sort of like objective standard. You can't make it an American formulaic. It's about hiring managers, having real dedication to the process and caring about the outcomes. But overall I'd say talent assessment. I would trust the market signal better.

Like how has this person's trajectory been? What are their peers and colleagues say about them? What have they been a part of? What success have they had over and above the signal we'll extract in the interview process. And then I would overweight our impressions of fit and underweight, what the world tells us about this person.

Cause ultimately it's as much about us as it is about them. Just because somebody is not the right fit. It's not good or bad. It's just not 

Brett Berson: [00:27:48] a fit. You notice that anyone on your team can be trained and learn how to be exceptionally good at assessing talent in the interview process. Or are there certain people that just have a knack for it?

And it's almost like a very specific talent that yeah. You can kind of hone, but there's certain people that are just exceptionally good. Yeah. 

Marco Zappacosta: [00:28:06] Yeah. I think this is a talent that varies. I think you can train it up and be better at it, but there's no doubt that I think some have better eyes for talent or a better nose for when somebody is spitting something or embellishing something.

So it's a combination of like eco and IQ, the IQ to just be really a tuned to how they're talking and how they're positioning themselves and articulating themselves. And then, you know, an IQ too about like, Hey, this is BS. You have to have enough mastery or depth in the topic to be able to audit that as well.

So yeah, I don't think this is a skill that is evenly distributed. I do think though, the bigger impediment. Is recruiting as simply the, like what differentiates good team builders from more mediocre team builders is just how many hours they put into recruiting. Typically it's a contact sport and it's hard to find shortcuts around it.

It's really about the hours you put into it and how much you grind on finding the very best people. So that typically separates, I think, hire managers more than their ability to assess talent. I think a good process can do a lot for assessing talent, but yeah, that skill varies and maybe varies most of all.

Once you're starting to talk about executives and I think earlier in people's career and in roles at the company that are sort of more individual contributor roles, you're really hiring somebody for the talent that they have and there's judgment in the application of that talent, but it is in a narrow enough construct that you can audit it.

I think fairly well think of a new grad engineer, for example, or the flip side for executives, really their output is like decisions and. Through that the like main thing that you're hiring for is good judgment. And that's a very fuzzy, vague concept that I think those who have hired a lot of executives are better at simply because they've had more at bats, a 

Brett Berson: [00:29:57] couple of jumping off points that I wanted to go back to.

But on that last closing thought, are there specific ways that you have changed the way that you assess executives to increase the odds that you can have conviction in their overall judgment? Yeah. 

Marco Zappacosta: [00:30:11] I find behavioral interviews really having them take me through specific experiences in the past, rather than how they would react to a Thumbtack example.

It's easy to be. Miscalibrated when someone is speaking to something where you have like infinite context on and they have zero context on, I think it's easy to be like, oh, well they don't get it. Or they're they weren't that quick on their feet about it when you're actually just totally miss appreciating what somebody was zero context is gonna know about.

So. Not asking things too much about some tech or that are thumbtacks specific, but speaking more about their past and going really deep, I'm always surprised that you know, how little interviewers probe, sometimes they just want to check the box when really like these questions about, Hey, tell me at a time when you really proud of an accomplishment that you and your team did.

And I'm not, I'm not just interested in the headline. I want to understand what happened and the role that that person had and the challenges they had along the way the regrets are, or when they look back the decisions they would've made differently because of the hindsight benefit or learnings takeaway.

So going deeper on a few things and not trying to ask 17. Unrelated questions. Cause you think you, you need to touch on all these issues. So I'd rather spend 90 minutes going deep on one topic or two than a more casual conversation that touches on a lot. I tend to feel like you get more signal about someone sort of like judgment and thoughtfulness by really pulling one thread all the way through.

That's my approach. The other thing I wanted 

Brett Berson: [00:31:51] to pick up on is you were talking about the role of referencing and I'm just curious, how do you structure reference calls or I'm assuming, sort of hearing you talk about the interview process. It's somewhat similar. And so it's really about probing and the five why's and that type of stuff, but anything you do in that unit of time or approach in and around referencing that you tend to find is high signal.

Marco Zappacosta: [00:32:11] I think a couple of things, one is just being really clear with yourself about what you're trying to understand, and by having a narrow focus about the talent experience or skills that you want this leader to have, you can really structure your. Reference call about those questions directly. And, you know, there's nothing worse than what did you think of this candidate or were they good?

It's like, how do you answer that? And of course, a reference by and large is going to say, yes, they likely know. And like that person more than they know, and like you, but when you ask somebody a specific question, like, Hey, tell me a time where you saw this leader, build a new team, and this person's gonna be hard to build a new team.

I'd love to hear about that. They said they did it at this company. Can you tell me what you observed and go deep on that? And people typically let their guard down and generally share more details. And I think you gotta be really attentive to. The language people use. I think people are always careful.

And so it's not always full bore, so small things can, can mean a lot. And, you know, I often will end references by trying to get more references. And the questions I ask are, Hey, if, if I want to be convinced that this is the right person for this job, who else do you think I should talk to? And if who, should I go talk to, that's going to tell me that this might be a mistake.

And by being explicit about asking for people, who's heard around both sides of that and letting people give both types of names and not just sort of one name, nobody likes when a reference is just digging for muck. That's not fair either. So go deep on the skills, um, ask about real situations, not sort of general impressions, uh, listen super carefully because it's sort of a coded conversation.

And then don't be scared to keep asking for more names. And any one reference is a little bit of a. Tenuous signal, but you start to get six, seven, eight people who know this person and have worked with this person for years, you can get a really strong signal on somebody and that is worth a lot. And I think tends to be something is under invested.

Brett Berson: [00:34:16] The last thing I wanted to hit on in culture is how do you think about culture as a tool in service of what the business is trying to achieve? And I don't know if you think about that or don't, but, but I think that one of the things that I've noticed that's often lost is that there's no objective, great cultures.

There are strong and weak cultures, but if you think about Google and Amazon, both are obviously exceptional companies. I think when you look at the culture or the way that they behave, they're not swappable like the early days of Amazon would have been a failure. If it had Google's culture. And so do you think about culture mapping to what you're doing as a business or another way to say this is you go start another company in the future, doing something different with the culture have to be different for it to be successful.

So 

Marco Zappacosta: [00:35:11] my view is that culture is absolutely in service of the business, realizing its objectives of realizing its vision. And it is a means to an end and not just the end in and of itself. And so I think it's important to recognize what are those business requirements or what are the challenges. So for example, the first time we've done our values exercise twice.

So the current incarnation is, is round two in the first round. We had a value called reason from first principles, and that's very similar with lead with why, but. The evolution from one of the other, I think, highlights this where we've always had this both as a quality, but more importantly as an approach that we thought was vital to success.

And that was simply because there was no example for us to go copy and paste from, to go learn from, to go sort of adapt. It was not something that we could reason about through analogy. We had to really reason about this from first principles. But interestingly, when we had reason, first principles as value, it was almost too much of an emphasis on reasoning.

And what we realized is like that verb was creating sort of a, an anti-pattern a strength that was being over applied, where there was too much debate and discussion around the why of something past the point of diminishing returns. And so when we went to evolve the values a few years ago, year and a half ago, That approach still felt fundamental to us, but in how we had structured it and talked about it and celebrated it, we had not quite implemented it in the right way.

And so we felt like lead with why spoke to the behavior that we wanted more effectively and it led us tell the right story. So it's interesting that even something I think is fundamental to our success, that is core to who we are even just like how you frame it, how you talk about can lead to different implementations.

And so it's a, it's a very subtle. Subtle effort, but ultimately things we pick and the things that we organize around and hire around and promote around are things that we believe will build to a really effective team in service of the mission and vision that we are chasing. So switching gears 

Brett Berson: [00:37:27] totally different direction.

We'd love to talk about board meetings, going back to the sort of top of the conversation. I think one of the areas that's under explored is how to run really good board meetings. And I think in talking with founders, it's particularly tricky in the first five years of the company when it's very investor heavy.

And what I hear more often than not is the value that I get from board meetings is preparing for them. It tends to be a dog and pony show. I get very little value. We get bogged down in the wrong things and it tends to be a time suck. And so given you've been. Building your company for a while now across different phases.

I'm curious what you might share to founders. Like they've raised their series a, they have a 30 person team and they're trying to make it really useful or at least effective. And I'm curious, sort of what comes to mind for you there? 

Marco Zappacosta: [00:38:20] Three roles that a board plays, you know, the first easiest one is an administrative one.

So there's some amount of just option approvals and minutes and all that sort of stuff that just has to get done and needs to be efficient. And that's sort of it, the second piece I really think of as an accountability mechanism, what I encourage founders to think about is how do they use their board to reinforce.

The accountability mechanisms in the company. An example of that is, is the plan presented to the board in such a way that they understand the commitments that are being made and by whom and what success looks like. And that can be implemented in different ways, but at its core, I think a board is about creating accountability for the CEO to deliver on this overall plan that has a financial component, uh, an experience component, an organizational component, whatever it is that that team is working on.

And it's really useful to clarify that to yourself and your team, like, Hey, here's what we have to do. And then recognize like, Hey, we're making this commitment to ourselves, but also to our partners, our investors, and that puts solidify and cement. These commitments and creates real accountability around that.

And I think that's super healthy, the last thing, and I think where people take sort of the longest time to practice this effectively, but your board is also a great resource when it comes to making important and big strategic decisions. And I think about these three things kind of separately. So the administrative, like she's got to check the box.

It's about being really diligent and preparation, getting people clear about what you need from them and, and the reasoning behind it. So you can just bang that out. The accountability piece for us, it's about defining the metrics that you're going to use to measure success. The goals that you're holding the organization to who are responsible for that, and then reading out on that.

Not in the meeting, but really in a deck that lets the board ask questions and we don't present that information completely. We present a very small subset of that and really focus it on where there's questions or concerns or issues that need to be highlighted for the board. And then lastly, the discussion bit.

And here's where we really try to leave the most time for is recognizing a what's important question to the business. Um, you know, the one that we just discussed at our last board meeting was our future of work. What is Thumbtack the office, the working habits going to be like post COVID and we have strong point of view, but we wanted to make sure that our board stress tested that.

And you know, the benefit is that they are often involved with many companies or have been operators themselves. They've built big teams seeing transitions. So it was really useful to bring them along that journey and, and get their input and not just like. Superficially like, Hey, can you just read this and rubber stamp it, but wrestle with it.

Tell us where you think we're being different or out of line with maybe some of your assumptions or expectations and why, or, or what patterns does this not fit? What concerns do you have? What questions are we not asking that we should be asking? And I think that really helped it really sharpened our thinking and makes us more confident in taking these big bets.

But the challenge with that is figuring out the right moment to bring them in, because it's not day one of a project where you're still trying to like figure out up from down and, and how you're going to sort of orient yourself. But it's also not like day's sort of launch minus one where it's like all set and that's, it there's really no opportunity for real feedback.

So where along that journey, you know, once the ideas have had enough time to. Solidify and organize themselves so that you have real coherent point of view, but not so late that you've already built things. You've already coded things. You've already designed things, and that just takes learning. And I think ultimately I think trust that being vulnerable with your board, being open with them, letting them into your decision-making process.

And the early thinking is healthy. And they're not going to question your leadership simply because you don't know exactly how you're going to do something yet. And it's often a way to build strength and build trust by doing that well. So it is a learned art, I will say though, the most important thing is that the board.

Does not create any problems or create negative value, which is unfortunately very common. And that is a challenge, I think, particularly for new founders and pushing back on some board expectations, really coaching people in the room to say, Hey, you know what? This is an interesting topic, but maybe not right for this group discussion, we'll go deep with you separately.

But we got to turn back to this other thing that I think is, is really why we're here today. Is there often people who have more experience and more cachet and are on multiple boards. So these founders can, I think be a little like overrun by those personalities, but that's a really. Unhealthy 

Brett Berson: [00:43:18] dynamic, a couple areas to jump off on.

And the, in that last category about teeing up strategic conversations, you mentioned, when is the right time to surface that, are you able to share a little bit more about maybe how you approach setting context or making the most of that conversation? Maybe pick the, the example you were talking about in terms of Vivian office, remote, et cetera, maybe strategy for the company, how do you context load and then run that session?

So it's not a bunch of people pontificating or kind of one of the things that I've noticed is that boardrooms can turn into people, wanting to show off with one another, for whatever reason, or there's a lot of unproductive ways to have these more strategic 

Marco Zappacosta: [00:43:56] conversations. The first order question is what are you actually looking for feedback on?

And, you know, in our case with the future of work discussion, we didn't necessarily want a discussion about specific implementation. What's the real estate strategy with this? What is the comp philosophy? What's the travel expense and this and that, and really focus on the risks and the trade-offs that we were making and ensuring a, that we were all aligned or on the same page with what those trade-offs are.

And then be talking about the framework or heuristics that we were applying that was leading to the outcome. And the point I'm trying to make is that these discussions benefit really from an alignment around priors around approach around the why, once you do that, and if you do that well, it typically solves the ticky-tacky stuff.

I think the mistake is when somebody brings to their board. An implementation without this context is of how they got to that decision. When it's really hard to have a discussion around just the decision itself, because then you're going to get all these personal points of view or like, oh, I've seen this, I've seen that.

I don't think that works. I think that is going to cause problems and nobody's grounded in the same reality or framework to evaluate that. So instead showing the answer, but really as a means, tabbing it. Conversation about the process that you got to that answer the principles you use to define that answer that I think is really where you want feedback, because what you're trying to ensure is not that your board would do this the exact same way that you would, but that your board recognizes the trade-offs that you're making and believes that it's being thoughtfully considered.

And if not get their feedback on why and adjust accordingly, if it's truly the case. So I really an orientation on why much more than the what or the how. And I think that breeds the best conversation and maybe more practically the way we think about it is we have, uh, an extended leadership team at Thumbtack, which in some ways is sort of like the directors and above it's about 40 odd people.

And often the content we use for the board is the exact same content we're using for that group. So it's folks who. Have a deep understanding of the business, a lot of context, but they're not in the weeds of this tiny decision. They really want to be brought along the process, understand the principles, have a voice in shaping the decision, or at least it should simply be heard.

So we tend to use a lot of the same content and process for our extended leadership team. Like in this case, we literally took them through the exact same content. We took the board through and find that that is like a good way to hit the right altitude. If it, if it's the right altitude for this group of directors, it's typically the right altitude for the board in that 

Brett Berson: [00:46:50] core, second bucket that you talked about of it's a tool for alignment.

I think you said commitment and accountability. Is there a way that you have approached this maybe other than, well, here are our goals. Here's who's accountable. They present on their goals or, or you said, I guess they do the read ahead and you don't even run through it, but do you structure that around creating a healthy commitment dynamic?

Marco Zappacosta: [00:47:12] So I think a couple of things, one is there are different facets of this, so there's the financial aspect. So how did you do against plan or budget? There is the long-term health of the business aspect, which is using metrics that we believe are the best indicators of true performance and health. How are we trending?

How are we doing? And then there's finally the operational side of like, what are the specific goals, projects, or achievements that we said would happen and what did happen? And the important thing is that. First half of the documents do a good job of explaining that. And for us thing that we've invested a lot in is this standard metrics pack that we use internally to think about momentum in the business and what's working and what's not.

And we also use for the board. And so it's not this like translation that needs to happen between how we think about it and then how we present it, which I think is something that often happens. You have different metrics sets or packs or whatever. So I think aligning the internal metrics set the internal KPIs that are being tracked and managed to, to how the board is evaluating the success of the business is really important.

And then I think the thing that people really care about is like, do they have a. An opportunity to give context in the right way and being in the room. If you're a leader on this thing, owning it to the board and having a chance to call out what's going on and what you're doing about it, I think is a great way to build accountability and also just focus around these things.

So aligning metrics and letting the people who are responsible, be the ones who are in the room, talking about it. I think a really demotivating thing is having your boss talk about something that you're actually much deeper on that you're ultimately responsible for, but you're not able to be the front of house for that sucks.

And so I think too often teams seem reticent to bring people through board meetings or to have someone who's maybe more junior, but who's really the one driving that product, that driving that experience, driving that project, come and talk about it. I think that is super healthy as well. And maybe lastly, we share our board decks with the whole company, right?

Seven 800 odd people now and still do that. Maybe one day will no longer be plausible, but what we use it for is internal alignment and saying, Hey, look, this is what we told them. This is how we're thinking about it and to really drive alignment. So I think it's something that should be integrated, not simply with the board meeting and the leadership team and that, but really more broadly.

And you got one story for everybody. You've got one set of concerns for everybody. You've got one set of priorities for everybody. You got one set of how are we doing? What's on track, what's off track. I think that is really powerful because then people know if I'm talking about this issue that I talked about highlighting for the board and why I'm concerned about that, or why I'm excited about that.

And this is not casual. So I find that to be a useful thing to drive alignment and leverage the board meeting for more than just those few hours every quarter, but really have it be something that benefits more broadly. 

Brett Berson: [00:50:27] Have you always made the decision of sharing the board deck with everyone since the founding 

Marco Zappacosta: [00:50:32] days.

And that's always been my approach. Having never worked anywhere else. The thinking I often have with this is like, what would I want if I hadn't started this thing, I just worked here. And typically the answer boils down to, I just want to be treated like a partner, like someone who's being asked to take on important things.

And through that as being trusted with all the context that they need to do their jobs. And I say presume, good intent and presume you hire good people. And they act in good ways. So this never caused problems for us. And there've been the source of a leak. You know, obviously the bigger you get, the harder that gets, but I'm always inclined to create policies that solve for.

The base case, I think too often HR policies or legal policies are built around solving for the exception, but then you kind of force everybody to operate in this worst environment simply because there could one day be a bad actor who does a bad thing, but I'd much rather solve for the 99% and be very explicit and serious about what our expectations are if they're not met, but trust people to be good, hire well, and trust them, 

Brett Berson: [00:51:37] that was sparked with something that you just said is the idea that you've been building this company for over a decade now, and it's the only place you've ever worked.

And so you've kind of had to figure things out as you've gone. And one of the interesting things about that is that throughout the life of the company, I'm sure you constantly get advice. Perspectives on everything you're doing. Have you learned anything about filtering advice when you haven't done something before?

Marco Zappacosta: [00:52:06] It's a tricky question because on one hand I've gotten so much advice and help and input. That's been just tremendous, like more than I can even appreciate, and I wouldn't be here without it. So maybe here's the distinction. I think advice for tackling challenges that are commonly felt across similar companies.

It is really valuable too. Understand best practices and best approaches. So recruiting, right? Everybody in our industry, it needs to recruit. It's hard. It's hard to do well. There's a lot you can learn from companies who've thought hard and worked hard about that. And there's a lot that you can just sort of insource.

Uh, you don't need to invent, I think where that advice breaks down and where I think you need to be very skeptical or at least recognize that this advice is context specific to a different context. Our questions about that are specific to you. So how should we think about the breadth of our categories?

Should they be narrow? Should we only have one or two? Should we be very broad? And it's example of where basically every smart person we talked to told us to go narrow. And in retrospect, that was a mistake. And I'm glad we didn't listen to him because we wouldn't be here. Cause everyone who did failed. I think there's a lot of examples like that.

The tricky part is like, you're starting this business because you have a unique insight. And also because you think there is a opportunity to do something different, to do it better, to do it in a way that others haven't seen or appreciated. And that's likely to be a contrarian approach. In some degree, a product strategy, a business strategy, a marketing strategy is sort of design philosophy, whatever it may be, you need your own point of view.

So for the things that are very specific to your business, to your market, to you, and if you gotta trust your gut and the challenge is you've got to be right, and there's just no way to outsource customer development. There's no way to outsource your growth strategy or your business strategy in terms of how you might price or monetize.

Those have to be homegrown because they have to work for your context. But when it comes to stuff like GNA recruiting, thinking about how much you should pay this person or leveling, or how many levels, there's a lot of infrastructure you can borrow from others. And Silicon valley is a beautiful place because I really just have to ask people are incredibly open.

It's not a zero sum mentality. It's very positive, some orientation towards sharing and helping others. It's a balancing act. And it's useful to recognize in the ways that you're not a special flower or, you know, early days you think you and your company are special in every which way. And then over time, you guys like, Nope, there's a lot of stuff that we go through that everybody goes through.

And then there's the some. Real areas where nobody can tell you what to do. And you're almost certainly not going to get it right by listening to what an advisor or some random person tells you, even if they're smart and successful, simply because they're not the ones in the weeds, they're not the ones who know your business and your customers in your market.

You're that person and you have to be right. So yeah, I might break it down that way 

Brett Berson: [00:55:10] with that framing. Has there ever been an instance where you thought something you could adopt best practice, but really you had to reinvent or trust your gut or go in a different way, or it's pretty obvious for you to filter into one or two buckets.

Marco Zappacosta: [00:55:22] The one that instantly pops to mind, and we thought about customer service. Originally, we had just read Zappos is Tony Shay's book stumbling on happiness. And we really took a very Zappos oriented approach. And we really didn't think hard enough about our customer base, these small businesses, what exactly they wanted, how they wanted it.

And it was a 18 month distraction. And it's a type of thing where yes, everybody has customer support. So it was useful to be smart and go talk to others and listen about their experiences. But it was probably a mistake to over-index on any one experience. And it was seven years ago. So we've learned we've grown, but it is one more example of you got to recognize.

What is true, what's uniquely true about yourself and your business and what is more common that you can just copy and paste from elsewhere. This influenced 

Brett Berson: [00:56:18] the way that you think about giving advice, maybe to your team, or maybe more broadly outside of the company when other CEOs is this, how you divide what you're willing to share.

Marco Zappacosta: [00:56:27] It's not so much how I divide, but it's definitely how I caveat it. And what I tell founders that I talk to them, be like, Hey, I'm going to give you a really strong point of view. And my point of view, I'm tell you why and why it did or didn't work for us. And then you should do with it, whatever you want.

But I always found it really annoying when you talk to someone and they caveat at all, or they're hesitant about over extrapolating. So I simply say, Hey, look, I got one experience. You can ask me about any of it and I'll give you what I think. And then it's on you to think about how to apply it. And I don't care what you take or don't take.

I'm just trying to be a spark for you to get sharper. So generally I just try to be. Very opinionated, none of them worse than asking for advice and not getting a sharp point of view. I wanted 

Brett Berson: [00:57:12] to end on the topic of habits and rituals and maybe company rituals and your own rituals. How do you design a day or a week now that you're running a company at scale and they're habits, rituals, meeting structures, questions.

You ask yourself on a regular basis that have been really useful for you. 

Marco Zappacosta: [00:57:31] The most useful thing is just being explicit with myself and my leadership team about what I am focused on. I do it now for the half in the next six months and using that as a lens to audit my calendar, literally like going through and tagging things and looking at percent of day percent, a week percent a month, going to various topics.

And I think the calendar is just the best way to audit. Are you actually investing in the areas that you want to be invested in? If it matters and you want to work on it? You're going to put time into it. So it's going to be on your calendar. So I do that religiously and I get a lot of value just sharpening my focus, ensuring that my time is going to the right thing.

Maybe the most important aspect of that is having a good framework for saying no. I think being in this position and just being in a rapidly growing and changing business, it's kind of like infinite demands, but by being clear with myself and my team about, Hey, this is what I think matters right now.

And here's where I'm going to go focus. Then I can say no, or I can deflect, or I can say not now Oregon say, Hey, not yet. And that is useful because you want to be able to give people a good answer when you're saying no why? And this sort of clears the way. So that is probably the most important ritual I found for.

Ensuring that my time and therefore sort of the energy and focus that I can create goes to the right areas. 

Brett Berson: [00:58:55] And so on, that would sort of a theme be for the next six months. The number one most important thing is recruiting our executive team, or what is an example of that? And then do you basically look on a weekly basis and say of the time this is how much time went into that thing?

Marco Zappacosta: [00:59:10] Exactly. So, I mean, for example, I am recruiting two executives and a board member, so that's a line item. There are a couple of big product experience initiatives that we have that I want to stay close to and be part of the development of, there is a big strategic question that we face over the next six months that we've already set to the board.

We're going to talk about it in July and there's work that needs to happen to go do that. And there's sort of a new team that I want to invest time in. Bringing together. And you know, that'll never be a hundred percent of my time and there's probably a few more to do's that I've left off, but it should be like 75, 80% of my time.

And then things that come up, things that happen we'll fill in the rest. And it's always a surprise when you look at your calendar and you're like, whoa, I've signed up for a lot of sign up for way too much. We got to pare this down. We got to start saying no. And it's one thing when you say yes to a request in the abstract, once you see it on your calendar and the time it's going to take and the investment that's going to be required, you can be smarter about it.

So that to me is really important, really helpful. Do you have a 

Brett Berson: [01:00:15] framework to decide what you as the CEO. Should filter it up, that it should be in that 75% bucket or it's just judgment. And you say, yeah, this is what's most important. And I should go spend time on it. 

Marco Zappacosta: [01:00:26] Yeah. I mean, I don't have a super explicit framework for it, but I'd say the couple things I always put in there a are things that only I can do, or I need to do myself.

So recruiting an executive saw me obviously in partnership with my recruiting partners, but it's just takes a lot of my time. Uh, secondly, it's, it's things that are gonna be sort of one way decisions, binary decisions, it reversible decisions. Those are often things that I am very interested to be part of.

Not necessarily because I need to author, but those are the things that I need to feel confident in and, and be ready to own because it will be my call. Um, another thing is anything that feels like an existential risk and existential is, is a big, scary word, but maybe said sort of. More slightly than that is things that are the key inhibitor of our longterm success.

Like when you think about what's the gating factor today about achieving the vision and realizing the potential you have in the business, it's typically not 17 things. It's like one or two. It's like, man, if we don't fix these two things like we're in trouble or there's just no way we're going to get to where we want to go.

And things that cause existential dread things that keep you up at night, those are for sure things you should be spending time on. And then lastly, there's some pageantry to this role, especially at scale and realizing that your participation. It's not always sort of for your benefit, but sometimes for their benefit or for the stature that that initiative has for those people or those topics have internally.

And that is something to consider and recognize where that time is going to support or pull up various things. So those would be the types of questions I ask myself, but as all things, isn't, there's no formulaic answer. And usually you get in trouble. Anytime you try to be too formulaic about this, it takes good judgment and it takes self-awareness about where you can actually help and where you got to trust or delegate.

So you can see why self-awareness is something I care a lot. 

Brett Berson: [01:02:26] And then on the flip side, are there company rituals or maybe things that you do as a company that an outsider might think of as a little bit weird, but really makes total sense and is really impactful to the way the company operates or communicates or those types of 

Marco Zappacosta: [01:02:42] things.

Yeah. I mean, I'm trying to think COVID has exploded all of that. We were a very office centric culture. We invested a lot in our physical environment and just use that to bring people together and to build ties, build culture. And that has been obviously a huge change. So I am struggling a bit to think of in the COVID world, what sort of a.

A new ritual. Yeah. That's actually one thing that I've enjoyed internally of late. I'm reminded of it because I'm on a podcast right now is thinking more expansively about internal comms. And especially as we scale thinking about the one that many communications internally, and I've started recording a podcast internally, I've started to just find new ways to communicate to our 

Brett Berson: [01:03:24] team in the podcast.

You just cover a range of topics, things that are on your mind, people, executives in the company to elevate their ideas, or is there some other structure 

Marco Zappacosta: [01:03:32] to it, basically things that are going on that I'm spending my time on could be a new person. I just hired could be a new initiative. We kicked off could be a big decision that we just made that instead of writing it up, having the two or three other people that were involved and talking it out and reflecting on it and sharing in more vivid detail, how we went about it.

And so that's something that. I have enjoyed doing, because it lets people opt in to the content. They want the challenge with everything being on zoom is there's a real cost to that being synchronous. And everybody present at the same moment, especially as you sort of disperse is trickier and trickier.

So finding these ways that are more opt-in that left, let people self-select go deep on the topics they care about and then invest their time elsewhere and places that they don't 

Brett Berson: [01:04:21] just to end. I wanted to ask you the interview question that you mentioned earlier that you always ask, which is about what is someone, what is the thing that they're really proud of?

The thing that they did, and you sort of really listen intently to what they talk about. And I'm curious for you, when you look back at the 10 plus years you've been building, what's your answer for that interview question? 

Marco Zappacosta: [01:04:46] I would go in, in one of two directions on one hand, something that gives me immense pride is.

The organization we've built the group of people. We have attracted the values and behaviors we've put up and lived. And the vibe that that has created in the community that that has solidified. The only reason that we are, where we are today is because of the amazing people we've attracted the passion that they've put into their work and the creativity that has emerged among us.

Not any one person we've hired has had all the answers or all the ideas, but put enough of them in a room together or on a project and real magic can happen. And maybe the thing that I take most pride in is you could take a sampling of people over the last 10 years, and you would see a real common thread, a real consistency of values and principles and commonality, that investment and dedication, the team and culture and people and organization.

It's something I feel very proud of. And I didn't come into this business with some like amazing amount of experience or skills. I believe one thing I've really helped do is just attract amazing humans and engage them and retain them and bring them together to do something that collectively we never would have been able to do any other way.

So that, that is a real source of pride and something. I feel like I was a part of and the other thing, and I think Thumbtack has really been courageous in the strategic bets that it has taken has a real willingness to be misunderstood, to trusting our own thinking our own reasoning. And for a long time, there were many that doubted and there were many that sort of.

Weren't convinced, obviously that certainly gave us some doubts and, and caused some sleepless nights, but we stayed true. And what you see now that despite us being in our 12th year, we've never had more opportunity. This is the third year in a row of accelerating growth. And next year is likely to be another, and there's just a whole new chapter and a whole new opportunity in front of us that feels bigger and riper and more achievable than ever before.

And it's because we've stayed true and we've made bets because we believed in them and we were committed to them. And that sort of tenaciousness that doggedness, that willingness to be misunderstood because we had our point of view and we fought to make that true. It's something I take a ton of pride in.

I feel lucky to have been a part of that and, and, you know, enjoyed it. It was fun as hard as scary, but that's the fun part of. Being bold and having a point of view and banding together as the small group who has this secret, or has this unique point of view and bets on it and wills it into existence.

That is a, that's a lot of fun. 

Brett Berson: [01:07:39] That's a perfect place to end. Thank you so much for spending all this time with us. This was fantastic. 

Marco Zappacosta: [01:07:44] Awesome, Brett. Well, thank you. This is a blast.