After leading product & growth teams at Instacart, Wealthfront & LinkedIn, Elliot Shmukler is tackling zero to one as founder & CEO of Anomalo

[00:00:00] Picking a great company is a huge benefit to you and in your career, the difference between picking the next hundred billion dollar company versus the next 10 billion company is massive. And of course, financially, because most people get in these firms, but also in terms of other, but also in terms of how other people will see you, as you think about your next opportunity, your next job, they are much more likely to hire someone who's been in a more successful place.

Everything else being equal because they just feel like you've learned more about what a really successful company looks

[00:00:48] welcome to in depth, a new show that surfaces tactical advice, founders 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 today@firstround.com

today's numbers it's with Elliot Muchler, founder and CEO of anomala, which is a platform that validates and documents. All of your data. Elliot founded anomala after a storied career, as a product and growth leader at some of the most interesting companies around. Most recently he was Instacart's chief growth, officer driving fast and profitable growth in geographic expansion.

His jam packed resume also includes stops at wealth front as the VP of product and growth and as a product leader at LinkedIn and eBay. So in today's conversation, we pull on threads from his newest role as a founder of a startup going zero to one, including his biggest surprises in the transition from executive to CEO.

We also touch on how he prioritizes his time at a startup still in the earliest stages of company building and how to avoid wasting your time on prospects that are not all that interested in actually buying. Then next, we turn our attention to his history of picking incredible companies to work for.

From the questions he asks as a candidate, to the decision-making frameworks, he borrows from his poker playing. Finally, we end with his biggest lessons from the best CEOs he's worked with, including habits that set the best communicators apart from the pack and the tactics for keeping office politics at bay.

So the best ideas are able to surface. All sorts of folks will find something worthwhile in today's conversation, whether you're a founder still in the early phases of customer discovery in executive with long-term goals of starting your own company or someone earlier in their career that wants to get better at spotting the next unicorn.

I really hope you enjoy this episode. And now my conversation was with Elliot, Elliot. Thank you so much for joining us out. Thanks for 

[00:03:27] So I thought where we could start is talking a little bit about this transition from being an operating exact for the last 10 years to starting something literally from scratch and particularly starting something in what might be considered hardcore B2B versus a lot of your experience, which is a little bit more consumer oriented, at least your most recent operating experience.

And so I'm curious, what's been surprising about that transition and maybe what are some of the insights that you've picked up in the last couple years of building zero to 

[00:04:02] one? Yeah, absolutely. I mean, one thing that's been surprising is actually how similar the work is. I expected it to be quite different, but in terms of my day to day running a small startup versus being an executive at a unicorn company, it's pretty similar.

You know, the number one thing you have to do is manage your time. Figure out what you're going to focus on right now. You're letting lots of fires burn as they say, right? Because you can't get to absolutely everything. And of course in a startup, things are more uncertain. You don't know if things are going to work out, you don't know where your company's going to go.

So there's an extra level of uncertainty, but day-to-day, you're kind of doing a very similar thing. You're managing your time and you're prioritizing and you're trying to work on the most important things 

[00:04:49] first. Are there any things you've had to unlearn to be effective and successful in the founder CEO role versus operating?

[00:04:57] Yeah. I mean a few, I don't know, unlearn, but probably had to go to, to the ways I worked when I was earlier in my career in a large company, you can count on data more. You can count on experiments. You can count on. Doing research and getting to an answer. And I've counted on that for many years in my career in a small startup.

There's an element of that, that you can do. You can go talk to customers and you can do research about your competitors and so on and so forth, but you're actually making a lot more gut calls. If you will calls on kind of your read or your instinct or your intuition about the market and where things are going.

And so that's different. It's actually a little closer to how I worked earlier in my career before I discovered the benefits of data and experimentation and all those other techniques, but it sort of forced me to go back to that time. And that mode of thinking, 

[00:05:53] is there an example or a story that comes to mind over the last year that 

Yeah, absolutely. So, so the first product we launched, how my current company anomaly was this very heavily machine learning. Based products. And we thought it was amazing, right? And every time we demo the product, folks said, oh, this is, this is like magic. Right. I want this. Right. And of course that got us excited.

But what we saw when we got it deployed, you know, there was some early engagement, but then folks stopped really using it, stop relying on it. We were still convinced that the product was magic. Right. And everyone kept telling that to us, that it was doing amazing things, but we kind of saw that it might be doing amazing things, but it may not be things that people care about day to day.

And so I kind of had to pay heed to that feeling and say, we should do something else. Right. I know it's working and we're getting new customers and the new installs every day. But I don't, I don't think it's going to work longterm. And so that caused us to really pivot the product quite a bit. You have a different product now, and it's still great.

Right. But it. Solve slightly different problems for, for slightly different people in a, in a different way. And now we're getting something completely different in terms of what we're seeing with customers. Did you 

[00:07:11] go from point a to point B very organically through conversation? Or what was the insider step function to move 

Yeah. Yeah. It was organically through conversation. I like to keep things very open with the teams. So when I felt that we weren't moving in the right direction, I sort of described that feeling to the team. And we talked through some possible alternative directions that we've heard, but once the team is armed with these alternative directions, they kept their ear out for what they were hearing from customers.

And they could tell very quickly, which way. Folks were pushing us now that they were attuned to those ideas and those possible directions, and that kind of evolves into a new direction. And then some things that are hard and some things were easy. So it was definitely sort of an evolutionary process rather than a big shift.

But the end result of course, is a big shift and a product that's doing much better. 

[00:08:07] Going back to something you mentioned a couple of minutes ago, the similarities between building this company zero to one, then operating at scale. One of the big ones was managing your time, figuring out what to focus on.

What have you learned about that? Going zero to one, or if you were to go teach a founder, here's ways to think about how to effectively manage your time, or maybe here's some gotchas or traps. What comes to mind in 

[00:08:31] that area? The big gotchas, I think, is that there's endless demand on your time from every corner, your team folks, externally your lawyers.

What have you. An endless demand on your time. And so there are going to be many things that are actually easy to do, easy to say yes to, but are not that important. Probably one of the best things you can do is just avoid those things. If it's not important, even though it's easy and it, maybe it gets someone off your back, don't spend time on it, spend time on the important things and be very crisp about that.

And you can tell people that I tell people that all the time saying, look, I know you, you want me to do this thing? That's not the most important thing right now. Here's what I see as the most important things. So that's probably the biggest gotcha that I've seen, but that's true in any situation, I think, where you really have to manage your time.

[00:09:26] so figuring out what the most important thing is, is that just intuitive for you? Or is there a process or a way that you hold yourself accountable to 

[00:09:37] that? Well, I think a lot of that. For startups, at least a lot of that playbook, because known if you're a pre-product market fit company, you have to get to product market fit.

And so what are the signals of product market fit for your type of business? How can you make progress toward those signals, which ideas, which initiatives, which undertakings will take you closer to product market fit versus just keeping you where you are, versus just keeping things going without progress.

And so you have to be aware of that. You have to constantly be asking, well, what does product market fit look like for our type of company and what are the best steps we have right now to get us there. And some of it is intuitive. You have to estimate the impact of certain things. And for our company kind of a SAS business, we have to estimate, well, which customer.

Is most likely to close in the next few weeks and get us to that higher revenue level. So there's some intuition there that you have to use, but fundamentally, you're always trying to see that next step and figure out which small steps get you closer to it. So for you, 

[00:10:48] if I were to look at the last three months and say, Hey, Elliot, what were you focused on and why?

And then obviously everything else you'd tried to avoid. What's 

[00:10:56] the answer there. So last few months we've been focused on getting to our first 10 enterprise customers that really love our product and our kind of longterm satisfied customers. And so that meant working with customers, right? That can be on that list.

Of course, that meant talking to prospects that we'd be excited to work with as a customer. And that meant. Doing work on the product that the customers we hope to put into that 10 customer group doing work on the product based on their feedback, their requirement, and everything else has fallen by the wayside.

The risk of, of maybe having my lawyers call me, I haven't worried about the company's taxes or filings with the government. I haven't worried that much about anything else aside from getting to that set of initial customers that love us. 

[00:11:51] So using that as, as a little bit of a pivot point, this whole process of early building, choosing customers, what customers to work with market downmarket self-serve top-down selling is a bit under explored.

What are your current thinking or thoughts about that early process of the path to get 10 or 20 customers that love it, choosing those customers, not becoming a consultancy, kind of all these different little things that people talk 

[00:12:18] about. Yeah, yeah, no, you're absolutely right. Not a process that a lot of people talk about.

And in fact, we've gotten conflicting advice on every element and every aspect of it I've come to a few realizations that I could share. One is if you can launch a bottom up product today, that folks will just adopt as individual employees of companies. And eventually you can sell to that company as an enterprise.

If your product fits that mold, if it's simple enough, easy to use and hits a need that kind of individuals have inside companies, you should do that. That method of launching our product, I think is superior to every other method that I've seen around me. But you should also be aware that not every product will fit that mold some products don't deliver value.

If an individual employee inside a company adopts them, they need the whole team, or they need the whole organization. And some products are complex. They're difficult to simplify, might take years to simplify them enough to make them into something that can be truly self-service. And so there, you might have some ways of getting a basic version of itself self service or, or generating leads through some sort of self service capability, but you should be thinking more about more traditional top down enterprise sales.

[00:13:45] Why are you so biased that if you can, in some fashion go bombs 

[00:13:49] up at superior, a few reasons. One, you just get a lot of data and learnings upfront when you have that bottom of launch. If you're doing top-down sales and you know, we went through this with our original product, you might have positive signals from a customer for many months.

Before you realize that you're not going to make that sale because enterprise sales cycles, top-down sales cycles are long months. And so it's actually quite difficult to learn very quickly in a top-down process, you have to kind of learn slowly or you have to get pretty lucky in your first few customers that your first few customers give you the right advice, give you the right feedback, generate enough revenue for your business to sustain the company until you can do the kinds of learnings you need to do.

So it's actually very hard to learn quickly. Whereas in a bottom-up product, you can learn very, very quickly. You can get traffic to it immediately. You can see if people convert. If they don't convert, you can survey them. You can talk to them. You can have an onboarding process for them, whatever you want to do.

And usually in these bottom of scenarios, decisions are made quickly because they're at the level of the individual. And so that speeds up your sales cycle essentially, and speeds up your learning. So you're able to refine the product and get to the right product much faster. Think about 

[00:15:14] the process of selling more top down, where there things that you've picked up in terms of knowing if the sale is actually going to convert or did it always sort of surprise you in one way or the other and, or are there other things you've learned in that founder led get your first few customers go about it?

[00:15:32] of the company, two things surprise me in the top-down process. One is usually people are pretty nice to you. It's a startup. If you're trying to sell to them, if they agree to that first meeting, usually they're going to be pretty nice. I sort of expected. More people to turn us down and to ignore us, Hey, you know, and to ghost us, so to speak if they didn't want the product.

And that really didn't happen. We got in contact with them. When we had a meeting, usually they pretty nice, even if they didn't want to buy the product that surprise one surprise to a lot of folks will say yes to all kinds of things, just to experiment and to learn even when they don't have a big need for your product, it doesn't take them that much to try something out or to have you set it up for them in a trial.

And so they'll say yes quite often, because they just want to see what it's like. They just want to learn about it. It's fun. It is important to sort of qualify who you're talking to and whether they're exploring your product, just because they like to learn about new products. Are they're exploring your product because they actually have this pain point that you're trying to solve and they're looking for something to buy.

And so that took me a little while to learn because I thought, well, if they say yes to trying it, they must be serious. No, not so much. Not always. So 

[00:16:53] how did you, you evolve if I were to listen to you talking to a potential prospect, once this was really crystallized for you, how do you make the most of that time so that you can potentially reduce the tire 

We spend a lot more time now trying to learn about their situation and their problem. So if you get on one of our sales zooms, now the whole first section is us asking them the prospect questions about, well, what technologies are you using right now? What problems do you have? Do you have an in-house solution that tries to address the same problem as our product?

Have you looked at anything else? So we ask a whole barrage of questions and usually you can tell from that, you know, are they serious? Our product is a data monitoring product, right? We monitor your data for data quality. And so we can usually tell in that conversation, if they're even serious about using their data, a lot of companies, we talk to, they kind of want to use their data.

They believe data will be important to them, but they're not yet that serious about using it, which likely means that they don't need our product. That's been a big change. And we now spend a lot of time learning about the prospect upfront rather than talking about our product. What are the 

[00:18:02] insights that you've accumulated across kind of any part of building the business and two, two and a half years that were big ah-has or unlocks, you talked a little bit about the go to market motion and refactoring the product.

I would assume as one category, but in any facet of the way that you run the company, build product hire, are there ahas or depth functions are unlocked? 

[00:18:23] I don't know if these are on the logs, but these are definitely things that have worked well and perhaps even better than I expected. So in terms of hiring the early team, I think I have, and the company I've been very fortunate that we could hire people.

We know primarily people we've worked with before. So a hundred percent of our team right now are people we've worked with before at a previous company. And so that has worked out quite well because. We take very little risk in terms of those hires. We know what they can do, what they can't do, where they need help and what they can be completely trusted to do.

That's made us move faster and I realize not everyone has the opportunity to do that, but if you have a network or in relationships that can allow you to primarily hire people you've worked with before, who you already know, that's going to speed up the team building, and that's going to make your team more effective over time.

And then on the technology front, we've had a lot of very specific technical learnings and product learning. So one funny thing we learned is that a lot of companies collect data that they don't really care to look at. They're just collecting it for the future and our product that's meant to monitor your data.

Originally, went monitor everything. And we of course learned that that was silly because folks just don't care about everything that they're collecting these days. They care about some very specific things. So that's changed our product. We've also learned that, and we sort of knew this coming in, but we've learned that the pull of the cloud and the pool of cloud technologies is very strong.

Every company is moving to kind of the leading cloud technologies now. So even if they're not there yet. So if you just align yourself with that wave in terms of how your product works and the technologies that you depend on, you're going to do 

[00:20:14] well, the first point about hiring people that you've worked with, is there anything about the people that you're pulling in that are thriving at a small company?

Is there anything unique about those people or if someone was great when you were at LinkedIn or great, when you were Instacart. You'd love to work with them and hire them. Now, 

[00:20:36] I think the one thing I would say, and this was an intentional choice on our part, and it's worked out as we tried to pull in people that are fairly well-rounded.

And let me explain that sometimes in large companies, you get specialists that can do one thing really well, but that's, that's really the only thing they do. And we've kind of intentionally pulled in not only people that were strong at their thing at the large company, but had many other strengths because in startups you get to wear all kinds of hats and you never know what you're going to be asked to do today.

So as a specific example, our engineering manager right now with someone who is very strong as an engineering manager at a previous company, but I knew that he could also talk to customers. You could bring him to an enterprise sale. And he would do well and he would represent the company well, and he would be a good salesperson in that context, despite being an engineering manager, that's pretty handy, right?

Because in a startup when you're just getting started, well, everyone's going to have to talk to customers. Everyone's really going to have to be a part of the sale. And so we did try to bring in folks that had these multiple skills and multiple strengths. 

[00:21:49] This might be a good point to go a little bit more down the hiring and people route you've obviously done a ton of hiring across different companies at different scales.

What sort of the frameworks that you rely on, or maybe the practices or your kind of worldview on finding exceptional people maybe before other people identify them as 

[00:22:10] accepted. So I definitely maybe have an unusual view where I primarily believe startups attract a lot of folks that may not fit with the traditional.

Large company career path. And that usually means they have some rough edges. They usually means they have some real weaknesses or things they need to work on, because if you could just rise in a traditional career path rise in a large company, many people would because that's pretty safe path to build your career.

So I kind of like to identify folks that have a very, very strong strength in some area and ignore their rough edges and believe that we can smooth over those rough edges over time as we work together or that I can compensate for those rough edges with other members of the team or myself. And so the folks that I've most enjoyed hiring and that have had the most kind of unexpected success, if you will, inside some of the organizations that I've been into in.

Have been these folks that are a little, a little awkward, a little rough maybe, or don't perfectly fit in, have some rough edges, but are also brilliant in one or more dimensions. And if you can look past the rough edges to their brilliance and make sure they're in a role that takes advantage of the brilliance that they bring and that you work with them to smooth over some of these rough edges, they're going to be very successful.

[00:23:43] As an example, can you give an example of what rough edges might look like? And what's your internal process for figuring out if it's a rough edge that can be managed or developed or made less significant versus what I would define as a fatal? 

[00:23:58] Yeah, for sure. So during my time at Instacart, as I was ramping up to my role and I was, you know, leading growth in product, I found someone in one of the operations teams that had suggested a really interesting growth idea.

To the executive leadership of the company. It's a story I heard. I heard that someone from this team had suggested an interesting idea and didn't get very far, the executive team didn't think that idea was good, rejected that idea. And so I went out and I found this person and I talked to them about their idea because you know, someone who generates a growth idea and is passionate enough about it to go to the executive team, many levels up in the organization and present this idea and try to get it funded.

That's kind of an element of brilliance. That's someone who's very passionate about their ideas. That's someone that probably really believes in the value of good ideas and maybe even had a good idea. So I went to track down that person and I talked to him and he explained his idea to me. And I realized that it was actually a great idea.

You know, he had made some mistakes in his analysis, but fundamentally he was doing the right thing. But it took me about an hour to get to the details, the communication skills. Weren't really there to kind of summarize it and boil it down to sort of an executive audience. And so that's a great example because communication skills it's very often the barrier is very often where a lot of these rough edges come from and that's completely learnable.

You can practice, you can script what you're going to say. You can write it down and have someone edit it. If your struggle is something like communicating or presenting, that's something that there are many, many, many different ways of working on and firming up. And it's pretty easy to teach folks how to communicate well.

Versus it's pretty hard to teach them how to generate great growth ideas. And so. This worked out fantastically. Well, I moved this person to my team. We worked on communications and presentations and I edited what they were going to say and their documents. And eventually they actually became a leader for a big area of Instacart, a product leader.

And so it was a great success story, but it wouldn't have happened if folks just focused on sort of the rough edges rather than what was behind them. 

[00:26:22] Are there other classic areas of rough edges that you see time and time again, that you find most people would look at an overlook, but because you have so much pattern matching.

You get it. So one is the sort of communicating ideas and in a particular way, or yeah, 

Today’s episode is with Elliot Shmukler, founder and CEO of Anomalo. Before starting Anomalo, Elliot was a top product and growth leader at Instacart, Wealthfront, LinkedIn, and eBay. He shares his biggest lessons from transitioning from exec to CEO, how to keep office politics at bay, tips to smoothing out a direct report’s rougher edges, and his frameworks for picking companies to join by thinking like a poker player.