SaaS Interviews with CEOs, Startups, Founders
How i built a team that was as invested emotionally as me
27 Oct 2022
Chapter 1: What event does the host introduce at the start of the episode?
Hey folks, hope your Q3 and Q4 is off to a good start. We just wrapped up Founder 500 in Austin, Texas. Hundreds of bootstrap founders showed up. It was an amazing time. I loved meeting so many of you.
This interview today is a recording from that session, which you're gonna love because now we have visuals, we have the founder teaching, and I made every single speaker include their revenue graphs and real artifacts in their presentations. Without further ado, let's jump in.
You are listening to Conversations with Nathan Latka, where I sit down and interview the top SaaS founders, like Eric Wan from Zoom. If you'd like to subscribe, go to getlatka.com.
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Chapter 2: Who is Nina Alagsuri and what is her background?
Please welcome to the stage Nina Alagsuri to tell her story. Good afternoon. It's great to be here. I think I need a day just to go through all my notes and process all the information in the last 24 hours, but it's been fantastic. I'm Neena Lakshuri. I'm the founder and CEO of a company called Zopa. It's usually not spelled with a small A, but I'll forgive that. It's all in capitals, Zopa A.I.,
Chapter 3: What challenges did Nina face in her first entrepreneurship experience?
A little background about me. This is my second venture. I became a first-time entrepreneur in 1999 in a very brick and mortar business of recruiting. So I'm not an HR person. I'm an engineer. I'm an electronics engineer. But I loved the whole business of people. And in that hiring business, which I ran for 18 years, it was amazing to see how subjective... how manual, how tedious hiring is.
And so in 2017, when we were close to 20 million revenue, pretty much owned most of the business myself, I decided it was time to disrupt my own business. It was a brave move, maybe a foolish one as well, but I was committed to solving a lot of the problems that I saw during the hiring process
to solve them with technology, use artificial intelligence, data back decisions so that you can remove waste. Process waste is one of the biggest problems in hiring and the bias which makes you hire the wrong people or lose the right people and both of them are dramatic. So that's what Zopa does.
So my topic is about how do I make, how do I create a team which is as committed as I am and as invested. So my first entrepreneurship was after a stint with a couple of large firms.
Chapter 4: How did Nina disrupt her own hiring business with technology?
So I was a very corporate person and turning into an entrepreneur was perhaps one of the most rewarding experiences.
things I did in spite of seeing the dot-com bust the financial crisis you know all of those dramatic events but what I did realize is that if as an entrepreneur you know I can wake up every morning feeling super excited getting out of the bed and saying this is the best thing I'm doing in my life I need to have a team around me which feels equally committed so most of my leadership team
are people who have been in in large companies my cto for example was product head at ebay in california i don't know how on earth we convinced him to move to sunny hyderabad in india and set up our engineering team And so on. So we've got people from large companies. But what I did realize, a lot of experienced folks are not always delighted with working with corporates.
So that was like a niche that I found with my leadership team. And not all of them are like that, but they've been very, very super committed. And the only reason for that is because I put myself in their shoes on why they would work for a startup like ours and stay with us. So, over the next 20 minutes, you know, I'll talk about the kind of incentive models for the full-time employees.
The main key takeaway from that is transparency, focusing the entire team onto the things that really matter. But how do you not leave anybody behind and both your tangible and intangible benefits call for retention. So, So let's start with the section one. So we set up when we started, when we were five people, we were just hustling, right?
Like we were just doing anything and everything that requires to be done for a startup. When we hit our sixth and seventh employee, we said, OK, we need to start creating a playbook on culture and values that really matter so that when we hire new new folks, we are sure we are hiring the right folks. And of course, we are in the hiring business.
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Chapter 5: What strategies did Nina implement to create an emotionally invested team?
So Zopa, just just just to let you know, Zopa is a DIY tool that helps large companies to As well as startups do their own hiring. So they take back the control of hiring, use artificial intelligence to remove all the process waste, automate a whole lot of stuff, including scheduling and interviews. So automated interviewing, automated interviews.
sourcing you know finding your candidates from anywhere in the world and so on and we have patents we are the only HR tech company on the planet to get the AI verify status of being responsible ethical and explainable AI so so we set up an ESOP plan down the line this was somewhere around okay there should have been a graph but
Somewhere in 2018, when we were just about ramping up our revenues, that was a time when we realized that if we have to scale up, that's the time where we need to get the team really focused on. So a little bit different from what Bridget said, the jam today, ours was jam down the line. And that was one of the filters for us.
If you're an entrepreneur, you need to invest that level of, you know, the number of years and that amount of time and energy to get the big bucks and be aligned. So we set up our ESOP in 2018, which was the second year of our operation, and everything was being done on Excel. We said, okay, you get 100 options, you get 50 options, Then we realized it means nothing to everybody, right?
Like you don't know what does that really mean? So we decided that we're going to have a visualization tool where you can actually see what is it that you're going to make with every milestone growth of the company. So we used a platform called Svested. I don't know if you've heard of them. They are Singapore based because we are a Singapore headquartered company.
And 10% of all our shares of the cap table were allocated to the ESOPs. Every single person in our company is on the stock option plan. So whether you are sales, you are technology, any field, everybody gets the ESOP. So four-year vesting period, if you're familiar with ESOP, There's a vesting period. There is a cliff. So it's a four year vesting.
We automate the entire process right from allocation to signatures. So it's completely automated. And this is the beauty of the platform because, for example, if you see the projected company valuation here, 22 million, that was our last valuation when we closed our Series A. This was back in December last year.
And so as an individual, you can log into your dashboard and see what your ESOPs are worth. So this made a huge difference because you can actually see what you're going to make. What are you making today? What are you going to make tomorrow? Now, addition to ESOPs, incentives, that was the other big thing. And again, that's about the jam today.
Every single employee in the company is on an incentive plan. Nobody is left behind.
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Chapter 6: What role does transparency play in team motivation according to Nina?
So whether you are a salesperson or you are a tech delivery, customer success, everybody is given an incentive. But here's an example of ESOPs.
this is the ESOP calculator which shows you we put in milestones when we closed our series A and this showed what would it be when we make series B series C and this really brought in the belief in the team and they really aligned together to kind of so now everybody is kind of preparing for series B because they know what they're going to make so so it really gets the team together it really makes everybody focus on the main issues
Ah, that was an interesting one. We gave a visualization on what would be four years down the line. So when we are Series C, what does it mean? And depending on how many ESOPs you've got. So here's a little bit of a visualization on what typically somebody with 100 shares versus 500 shares gets. And, you know, we kind of issue ESOPs every single year so that it keeps stacking up.
This is an interesting Excel that we use for our sales team. So again, it's very, very transparent. It's all available on SharePoint. You can put in your, this is for the sales team, where you have your ARR target. Again, we want to make sure everybody's focusing on things that matter. And the biggest thing that matters to us right now is the ARR and the bottom line.
So getting them all focused onto ARR So all our sales team is aware of what they're going to make by the end of the year. And we do monthly payouts. The moment you cross your thresholds, the threshold is usually 50% of ARR, you start seeing the money coming into your bank. So we leave nobody behind. All our non-sales team, the non-bankers,
Non-client facing folks are incentivized on the company ARR. So we set a company ARR target. And the moment we cross the 50% of that company ARR for the year, which for this year is 5 million, they are on an 80-20 model. So we leave nobody behind. You cannot do sales without delivery. You cannot do sales without product development. So it's really critical you get the entire team focused.
This is an artifact which Nathan recommended I should show. Again, it's all about transparency.
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Chapter 7: How does Nina's company utilize ESOPs to retain employees?
This was the first sales head that we hired. It was in 2019. We had no sales team before that. So very clearly, what's your base salary? What can you hope to make? And then we made sure that there's no cap. You can double your salary, you can triple your salary, but as long as you meet the 50% of your threshold.
Okay, this slide should have been before, but this is before the visualization platform. Ah, okay, got it. So this is what the ESOP platform looked like before we invested in Svested. So obviously it was extremely messy, very manual. So once we moved to Svested, it was completely automated and people were able to visualize what the ESOPs were worth.
This is where I mentioned about leaving nobody behind. So people join you for the visible benefits you give them, the financial benefits, the perks, but they stay with you for the intangible, right? They stay with you for culture. They stay with you for the empowerment and the growth that you're offering. So we have a culture code. We have five values on it.
We share them with every single employee who joins us so that we are all aligned and we are all on the same page. So that's Zopa. That's my team. Very, very proud of them. That's my leadership team. They are spread across three locations. I'm in the UK, but the rest of the team is in Singapore, India and UAE. These are our investors. The first investor is my husband, the first angel investor.
And trust me, it's not easy. He changes his hat very quickly at the dinner table and says, what's your ARR today? So trust me, careful, careful before you do that.
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Chapter 8: What insights does Nina share about aligning team incentives with company goals?
But we have a fantastic set of investors. The Series A that we closed yesterday. was at 15 times multiple. And I'm so glad I closed it before what's happening in the market now. But super proud of our investors. So yeah, I mean, that's the long and short on how we keep our team motivated.
It's all about getting into their shoes, making sure that if you expect them to work for your startup instead of Google or Microsoft, then you've got to give them what a startup can offer. So thank you so much. Give it up for Meena.